adminIN August last year President Mugabe announced the Government’s Ten Point plan meant to be used to maintain economic growth. The President said it was Government’s priority to return the economy to sustained growth and called upon Zimbabweans “to believe in ourselves, to believe in our collective capacity to overcome adversity and challenges that confront us.”
He highlighted that Government had also turned the spotlight on corporate governance throughout the public sector which he said has over the years fallen to well below acceptable levels.
“The extravagance of remuneration packages and associated benefits which Boards and management have blithely awarded themselves borders on the obscene, reflecting avarice and greed instead of the commitment to serve which we expect,” he said.
Some of the points on the Ten Point plan zeroed in on “promoting joint ventures and public-private partnerships (PPPs) to boost the role and performance of state-owned companies,” and “pursuing an anti-corruption thrust.”
There is no doubt that for the economy to move in the right direction corporate governance is key, and the message from the President when announcing the Ten Point plan is still relevant today and will be relevant in future as we seek to turn around the economy. Moreover, the promotion of public-private partnerships to boost state-owned companies will remain a pipe dream as long as executives running these companies throw corporate governance through the window. There is no foreign investor, or local investor for that matter, willing to do business with any organisation whose conduct borders on “thugery” and recent media reports about the alleged goings on at NetOne fly on the face of corporate governance which businesses were asked to uphold by His Excellency.
Corporate governance deals with the conflicts of interests between the providers of finance and the managers; the shareholders and the stakeholders; different types of shareholders (mainly the large shareholder and the minority shareholders); and the prevention or mitigation of these conflicts of interests (Marc Goergen, 2012).
In broad terms, corporate governance refers to the way in which a corporation is directed, administered, and controlled. Corporate governance also concerns the relationships among the various internal and external stakeholders involved as well as the governance processes designed to help a corporation achieve its goals. Of prime importance are those mechanisms and controls that are designed to reduce or eliminate the principal-agent problem (H. Kent Baker and Ronald Anderson, Corporate Governance: A Synthesis of Theory, Research, and Practice, 2010)
What we get here is that ethics of doing business should be followed religiously. Ethics on the other hand address questions about morality — that is, concepts such as good and bad, noble and ignoble, right and wrong, justice and virtue.
Reports of what has been allegedly taking place at NetOne, the first cellphone service provider company in the country made sad reading. We await the outcome of the investigations that have been instituted by the parastatal’s board, after the company’s chief executive Mr Reward Kangai was asked to go on leave, including a number of senior executives.
The company faces a number of allegations, which all border on corruption with management accused of running a company which owes the parastatal over $11 million, amid allegations that Firstel Cellular, allegedly owned by some senior managers, was used to siphon money from NetOne. It also emerged that several bank accounts were being operated in the name of NetOne with two signatories only but without knowledge of the board. Questions have also been raised on the procurement of equipment, with insinuations that some loan facilities were being abused. On that score, we urge boards appointed to superintend over state enterprises to be always vigilant so that they nip any form of irregularity on the bud.
Online Reporter
Londile Moyo