Govt con­cerned over fre­quency of paras­tatal board sit­tings

Chronicle (Zimbabwe) - - National News - Harare Bureau

VICE Pres­i­dent Em­mer­son Mnan­gagwa has said Gov­ern­ment is con­cerned about the fre­quency with which some paras­tatal boards are sit­ting adding a sig­nif­i­cant cost to al­ready strug­gling or­gan­i­sa­tions with­out cor­re­spond­ing im­prove­ments in their per­for­mance.

Giv­ing a key­note ad­dress at the fourth ex­cel­lence in cor­po­rate gov­er­nance awards cer­e­mony or­gan­ised by the In­sti­tute of Char­tered Sec­re­taries and Ad­min­is­tra­tors on Thurs­day, VP Mnan­gagwa said Gov­ern­ment is also con­cerned with the qual­ity of board mem­bers that sit on some boards.

He also said that be­cause board fees and di­rec­tor al­lowances are linked to ex­ec­u­tive man­age­ment salary lev­els some boards through self-in­ter­est were un­der pres­sure to re­view ex­ec­u­tive salaries up­wards re­gard­less of the state of op­er­at­ing con­di­tion of the com­pany.

“Cor­rup­tion has been blamed for the slow eco­nomic de­vel­op­ment of coun­tries and it acts as an im­plicit tax on in­vestors.

“Un­for­tu­nately in some in­stances, be­cause of weak cor­po­rate gov­er­nance prac­tices through the cre­ation of a net­work of re­la­tions of direc­tors and sup­pli­ers, for ex­am­ple, cor­rup­tion could be sys­temised.

“Gov­ern­ment is wor­ried with the fre­quency with which some paras­tatal boards sit adding to a sig­nif­i­cant cost to al­ready strug­gling or­gan­i­sa­tions with­out cor­re­spond­ing im­prove­ments in their per­for­mance. Au­di­tors are there­fore called upon to in­ves­ti­gate and carry out nec­es­sary tests on the sound­ness of some of these con­tracts and ar­range­ments,” said VP Mnan­gagwa.

He said, through cre­ation of a trans­par­ent and ac­count­able op­er­a­tional en­vi­ron­ment, good cor­po­rate gov­er­nance prac­tices in­crease com­pa­nies’ op­er­a­tional ef­fi­ciency, limit cor­rup­tion and sup­port eth­i­cal busi­ness prac­tices.

In or­der to ef­fec­tively fight cor­rup­tion, VP Mnan­gagwa said Gov­ern­ment has passed rel­e­vant anti-cor­rup­tion laws and es­tab­lished the Anti-Cor­rup­tion Com­mis­sion which has been given more teeth and grav­i­tas by op­er­at­ing di­rectly from the Of­fice of the Pres­i­dent and Cabi­net.

“For our anti-cor­rup­tion ini­tia­tives to be ef­fec­tive and sus­tain­able, we need to work to­wards elim­i­nat­ing the scourge from both the pri­vate and pub­lic sec­tors. The role that pri­vate sec­tor com­pa­nies can play in this fight is there­fore not to be ac­com­plices.

“Good cor­po­rate gov­er­nance in the pri­vate sec­tor can con­trib­ute sig­nif­i­cantly to a re­duc­tion of the scourge in the pub­lic sec­tor by ad­dress­ing most of the prob­lems and pres­sures em­a­nat­ing from the pri­vate sec­tor play­ers,” said VP Mnan­gagwa.

He added that de­spite the strate­gic im­por­tance of some state en­ter­prises, some of them have not been per­form­ing to ex­pec­ta­tion due to a num­ber of rea­sons in­clud­ing il­le­gal eco­nomic sanc­tions im­posed by the West. Re­gret­tably the Of­fice of the Au­di­tor-Gen­eral has con­tin­ued to note weak­nesses in the pub­lic sec­tor ac­counts, an in­di­ca­tion of gov­er­nance weak­nesses.

VP Mnan­gagwa said such a sit­u­a­tion has con­tin­ued to fuel cor­rup­tion, dam­ag­ing the coun­try’s in­ter­na­tional stand­ing and work­ing against the spirit of re­duc­ing Gov­ern­ment ex­pen­di­ture.

“As a re­sult, in­ad­e­quate rev­enue is avail­able for in­fra­struc­ture de­vel­op­ment. The fail­ure to ad­here to cor­po­rate gov­er­nance prin­ci­ples in Gov­ern­ment Min­istries and en­ti­ties is there­fore partly cre­at­ing the eco­nomic chal­lenges the coun­try is go­ing through.

“Fun­da­men­tal to good cor­po­rate gov­er­nance is the ap­point­ment of the board of direc­tors to over­see the op­er­a­tions of a com­pany.

“The board should there­fore pro­vide ef­fec­tive cor­po­rate and en­tre­pre­neur­ial lead­er­ship,” said VP Mnan­gagwa.

He said good cor­po­rate gov­er­nance is also im­por­tant in the de­vel­op­ment of stock mar­kets.

An unidentified man rose from the crowd to show his danc­ing skills dur­ing the Chop­pies car draw at Nku­lumane Com­plex in Bu­l­awayo on Satur­day. He goes air­borne in this pic­ture by Eliah Saushoma

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