Public Entities Corporate Governance Bill welcome

IN section nine, the Constitution of Zimbabwe highlights Good governance. It reads; “The State must adopt and implement policies and legislation to develop efficiency, competence, accountability, transparency, personal integrity and financial probity in all institutions and agencies of government at every level and in every public institution, and in particular — appointments to public offices must be made primarily on the basis of merit; b. measures must be taken to expose, combat and eradicate all forms of corruption and abuse of power by those holding political and public offices . . .”

And President Mugabe has on countless occasions stressed the need for adherence to the values of corporate governance and professionalism in both the public and private sector. It is behind that background that we applaud the Government for walking the talk on ensuring that ethics of governance are upheld.

In last week’s issue, we reported that Government is introducing substantive salary caps for heads of public entities, and those who breach them will be prosecuted. In addition, the State will also seize assets and wealth amassed from looting public funds. The Public Entities Corporate Governance Bill — gazetted recently — requires heads of parastatals, State enterprises and local authorities to sign performance contracts with Government.

The Bill assigns line ministers the responsibility to monitor the entities, including determining allowances and excludes permanent secretaries from appointment to public boards. It also proposes creation of a Corporate Governance Unit in the Office of the President and Cabinet to co-ordinate compliance with the Zimbabwe Corporate Governance and Remuneration Policy Framework.

Further, no one will be allowed to sit on more than two boards concurrently, and board members can only serve two four-year terms. The measures are in line with Government’s grand effort to curb corruption, boost service delivery, improve economic efficiency, growth and stability; and encourage investment.

The Bill responsibility “will of underline the line ministries (those ministries whose minister is responsive for any public entity) to more effectively monitor, supervise and oversee the management operations of public entities to ensure strict compliance by them with the provisions of this Bill, without, however, infringing on the autonomy of public entities.

“It outlines the role and functions of the Corporate Governance Unit within the Office of the President and Cabinet as a centralised advisory, oversight and support system for line ministries with regard to the implementation of the Bill. It will introduce some consistency in the conditions of service of members of boards of public entities. In particular, it will require members to enter into performance contracts with the Government and will allow their salaries and allowances to be limited”.

It continues: “Similarly, it will regulate the conditions of service of chief executive officers and other senior staff members of public entities and will allow their remuneration to be limited. It will give effect to the National Code on Corporate Governance Zimbabwe (ZimCode) to the extent that it applies to public entities.”

An online blogger says; “A corporation without a system of corporate governance is often regarded as a body without a soul or conscience. Corporate governance keeps a company honest and out of trouble.

If this shared philosophy breaks down, then corners will be cut, products will be defective and management will grow complacent and corrupt.

The end result is a fall that will occur when gravity — in the form of audited financial reports, criminal investigations and federal probes — finally catches up, bankrupting the company overnight. Dishonest and unethical dealings can cause shareholders to flee out of fear, distrust and disgust.”

What this suggests is that once the Public Entities Corporate Governance Bill takes effect, ills in public entities will be a thing of the past, and it is expected that there will be further tightening of screws even in ministries to make sure that proper work is done for the benefit of the masses.