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Zvamaida Murwira Harare Bureau
The National Code of Conduct drafted by government and the private sector proposes a raft of strict measures to be followed when pegging salaries for chief executives of companies and state entities to ensure that no one in future awards themselves mega salaries and perks.The code, to be launched by President Mugabe soon, also ensures chief executives do not unduly become chairpersons of boards of other companies.
According to the code, CEOs’ remuneration should be based on individual company’s performance and should also be performance and incentive based.
“Such remuneration should be approved by shareholders in a resolution passed by a majority of the members present at a meeting convened for that purpose,” reads the code.
The code also provides that a CEO should not be chairperson or director of any company outside the group without the written approval of the board of the company he/she works for.
Regulations applying to CEOs come in the wake of obscene salaries that had been of late awarded to top company executives without corresponding services offered.
The government has since imposed a salary cap of $6,000 for all heads of parastatals and state linked entities as an interim measure pending the completion of an audit to establish the ability by respective firms to pay such salaries.
The code provides for the establishment of a remuneration committee to assist the board in determining and administering remuneration policy for board members and senior management.
“The committee should be given clear terms of reference, which indicate the scope of its authority, role, functions and duties and how it relates to the board,” said the code.
It is also proposed that there be a balance between non executive directors and executive directors and that not less than 60 percent of board members should be non-executive directors who must be independent.
“A proper balance should be maintained between continuity of board membership and the sourcing of new ideas through the appointment of new members,” read the code.
The code also provides for the appointment of an independent non-executive chairperson who does not double up as CEO.
It is also provided that there be need to establish procedures for appointing and dismissing CEOs and putting in place a proper framework for the appointment of other executives.
The code stipulates that a person could not be appointed as chairperson of more than four boards and should this threshold be exceeded, the person concerned should justify showing ability, availability and capacity to discharge the roles.
The government was forced to take action after some exposures by the media that some executives of some private and public companies were awarding themselves salaries and benefits of up to half-a-million dollars while service delivery suffered.
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