Make managers, directors accountable

financials for the year-end to December have posted some positive returns on investment despite numerous constraints.
What is clear from the results that have come through so far is the fact that challenges do not always mean companies will make losses.

Thus far, companies that have reported profits include Innscor, Colcom, Chemco, FBC Holdings, Fidelity Life Assurance, ZPI and Natfoods among others.
It should, however, be noted that most public listed firms have not released their financials and all eyes will be on each of them when they publish them to see if they have come good on promises they made last year.
Difficulties notwithstanding, companies that put efforts at utilising resources efficiently, streamlined their businesses and employed more astute cost management strategies should be able to report positive results.

Gone are the days when companies would go back to shareholders with begging bowls and extortionate pleas for funding claiming the company would collapse if the shareholders did not loosen their pockets.
Intelligent managers in collaboration with directors have led their firms to profitability by streamlining, diverting from non-core business and making full use of internal resources.

In many instances, poor management and judgment capacity often expose bad directors when companies that possess unlimited potential make losses.
It is surprising, three years after the economy transitioned from use of inflation-decimated local currency to the multi-currency regime, that there are some managers and directors who have not yet figured the best model for their businesses.

In many instances there are companies that have recorded huge growth in sales and managed excellent gross profits, but realise a loss in the end.
The problem is that the managers and directors would have failed to model the businesses and craft strategies that ensure sales and volumes grow faster than costs.
Because managers are stewards, they should have the technical aptitude to devise strategies to best “steer the ship in unsteady waters” to reach calmer onshore.

It is the very reason they are the best paid in all companies and they should be made accountable for their actions. Surprisingly, in Zimbabwe cases of managers being fired for incompetence are few and far between.
But the cardinal rule should be that the well-remunerated bosses should be evaluated for their wisdom or lack thereof and be judged on their performance.

It has become a culture in Zimbabwe that management, even at perennially loss-making firms, drive the latest top-of-the-range cars, live in plush suburbs and enjoy a list of expensive benefits, which reflects trust in them.
And it is in this regard that shareholders, that approve these benefits at annual general meetings, always demand positive returns on their investments.

Arguably, at this point in time it is no longer acceptable for directors and managers to keep attributing poor performance to a difficult operating economic environment.
As such, shareholders should take to task directors and managers of companies that will not announce positive results this year and demand immediate change.
The economy is recovering steadily, but it does not mean an easier way to make profits, in fact, it may mean the opposite as competition intensifies.

After all, challenges such as high cost of finance, liquidity constraints, high electricity tariffs, external competition, low disposable incomes look like they are going to be with us for a bit longer and companies cannot wait for profits until forever.