Curse of boards, management

Panganai Kahuni
Zimbabwe is endowed with mineral riches, flora and fauna for tourism, arable and pastoral land for agriculture and above all, a highly qualified human capital base. These advantages alone are the right tonic for development. But questions that arise are: Why has our beautiful and resource-rich country failed to be one of the economic giants of the world?

What is wrong with our executive management and boards from both the public sector and private sector?
Is it that those appointed to corporate boards are always contending with low performances? Is it difficult for appointing authorities to fire boards of directors or these boards to fire management for poor performances for continually making losses? Although the rot is high in the public sector, it does not mean it is non-existent in the private sector. In the private sector we are told companies are either closing down, downsizing or operating at 30-40 percent capacity.

All private corporate executives have the habit of parroting the same challenges that they claim bedevil commerce and industry. One wonders whether corporate executives are in league with MDC’s rhetoric “tongai tione”. Zimbabweans are now fed up of hearing the same claims being repeated at every strategic gathering.

Almost certain to come from the lips of corporate executives is the song about high costs of production, obsolete equipment, high tariffs, influx of cheap commodities and policy inconsistence.

On the backdrop of these challenges, no meaningful turnaround strategies are formulated. In most business and marketing analysis lectures given at most Zimbabwean universities, it is clearly mentioned that a shrewd business leader is the one who is capable of turning challenges into opportunities.

This calls for innovation and creativity on the part of business executives.

Innovation and creativity are skills that allow business executives to manoeuvre through business risks and challenges box and formulating workable and profitable solutions.

Sustainability of company performances achieved through unnecessary price increases that usually target a poor worker’s bonus or civil servant salary increment does not improve productivity and performance of entities but only erodes value of workers’ income.

Price hikes are not followed by improvement of product quality and hence do not target to grow the market.

It also does not aim at increasing the local market base since it only targets increasing the price of the current production output. The concept of price increases as a means of covering or offsetting production costs reduces the consumer base as the same volume of commodities chew up the disposable income of the same consuming publics.

This concept in itself is an anti-growth in production levels, consumption and consumer levels. When commerce and industry does not expand production levels and market share the industry tends to stagnate.

When production levels remain stagnant, the production cost increases, resulting in companies downsizing or operating at below capacity and eventually closing down.

Ironically, the concept of price increase is made worse by the fact that executives continue to receive huge perks that militates against the survival of most organisations. One wonders whether it is not Perkins’ Economic-Hit-Man’s (EHM) theory at work. Perkins defines EHM theory as highly placed and paid professionals who cheat their own country, government, employees and publics out of trillions.