Finalise corporate governance code now

obviously due to the absence of a binding corporate governance framework.
During the first half of the year, the transacting public was shocked after the ReNaissance Financial Holdings had underhand dealings that resulted in the bank being placed under curatorship.

Whatever happened at ReNaissance is a clear indication of lack of corporate governance as some shareholders of the company and directors worked in cahoots with pliant management to plunder ReNaissance Merchant Bank.
Depositors funds were looted and inter-party transactions were rife.
In the process, Rainbow Tourism Group and Afre Corporation were affected resulting in the two companies being suspended from trading on the Zimbabwe Stock Exchange.

A number of companies have been involved in shareholder fights due to lack of transparency and accountability.
Executives are no longer transparent and accountable to shareholders. They lack responsibility and fairness whenever they are making decisions and implementing strategies.
Companies have collapsed not only because of the prevailing liquidity challenges but lack of corporate governance.
The composition of many boards has been queried, as they now comprise of people who are aligned to certain shareholders and their decisions would be biased.

Looking at some of the problems bedevilling our private sector, it is high time the proposed National Code on Corporate Governance is finalised and implemented.
The proposed framework comes at a time when Government is working on a new Corporate Governance Framework for State Enterprises and Parastatals to enhance their performance and viability.
The framework is expected to be enforced before the end of the year.

Government is attaching importance to issues of corporate governance and it would not contradict the proposed National Code on Corporate Governance.
Minister Gorden Moyo, who has been steering the code, is on record as saying the determination to revive the economy has seen Government taking a decision to restructure parastatals, which has been preceded by classifying parastatals into three groups, which determine whether they will be commercialised, restructured or privatised.

This initiative is expected to pave way for Government to retain its role of providing policy framework.
Corporate governance is the system by which companies are directed and controlled in the interests of all stakeholders for the purposes of creating, enhancing and sustaining value.
The formulation of a National Code of Corporate Governance was against the background of a plethora of unethical behaviour that was witnessed in both the formal and private sector of the economy resulting in decade of deformalisation, hyperinflation and isolation.

The establishment of the code has been postponed on numerous times due to financial constraints and human resources challenges.
Upon establishment, the framework will ensure that the country’s business, be they in private, public on non-governmental sector have efficient management systems, control structures and strike a balance between economic and social goals with a greater corporate conscience and accountability.

The overall aim of the project is to ensure that not only are resources utilised efficiently, but that boards act in the interests and expectations of their company and shareholders whilst at the same time reducing the risk of financial crises.

There is a need to ensure that there is accountability of a board and key overseeing management for the stewardship of resources. Therefore, there is no doubt that in any organisation good corporate governance is ultimately about effective leadership.
The establishment of a national code on corporate governance will minimise corporate collapses, establish minimum standards for corporate leadership, attract and preserve investment for overall national economic turnaround and growth.

Proponents of the initiative say the process would be broader and all inclusive, taking into account registered multinationals, private, pubic companies, parastatals, local government institutions, small to medium enterprises and the informal sector.

The Zimbabwe Leadership and Economic Forum, the Institute of Directors of Zimbabwe and the Standards Association of Zimbabwe are supporting the crafting of the code.