STT flags corruption risks in company boards across 16 municipalities

Lithuania’s Special Investigation Service (STT) found shortcomings in the selection of board members at municipal companies in 16 municipalities, LRT reported. The agency said mayors have broad discretion over selection committees and candidates, while assessment rules are not always clear.

The STT analysed how boards were formed at 40 municipal companies. It warned that unclear candidate assessments and identified political or other connections could put board independence at risk.

In some municipalities, mayors could decide whether to establish a selection committee, appoint its members and chair, or make decisions about candidates. In Druskininkai, no committees were formed to select the municipality’s board appointees. Candidates were appointed by mayoral decrees after only a formal check that they met the requirements. In Kaunas, the mayor could decide whether to establish a committee and could reject all candidates.

The STT also found cases in which people with connections to one another served on selection committees. In Kretinga, the same three people sat on the committees for five company boards, including the municipal administration director and a department head subordinate to that director.

Candidate assessments were sometimes formal or selective, the agency said. In Alytus, the documents did not show the criteria used to score candidates. In Plungė, a committee did not invite candidates to interviews but said it had assessed their professional, business and personal qualities.

At nine companies, between 33% and 50% of board members belonged to political parties or committees. At five other companies, the share ranged from 6% to 18%.

The STT said these connections do not in themselves indicate illegal conduct. However, combined with unclear selection and assessment procedures, they could increase the risk of politicised governance, conflicts of interest, nominal rather than genuine independence, and weaker oversight.

The analysis covered municipal companies in Druskininkai, Birštonas, Elektrėnai, Kazlų Rūda, Alytus, Kaunas, Klaipėda, Panevėžys and Šiauliai, as well as the districts of Kretinga, Šalčininkai, Trakai, Vilnius, Lazdijai, Plungė and Rokiškis.