Chronicle Editor
Prosper Ndlovu in Victoria Falls
ZIMBABWE has scored major successes in the region in terms of embracing corporate governance principles in the public sector in line with global best practices, buttressing the provisions of the Constitution.
The positive milestones are being realised under the Public Entities Corporate Governance (PECG) Act, which was promulgated in June 2018 and provides for the good governance of public entities.
The Act seeks to enhance accountability, transparency, performance, and sustainable use of public resources in line with Chapter 9 of the Constitution, which sets out the “Principles of Public Administration and Leadership.”
Speaking yesterday at the ongoing Chartered Governance and Accountancy Institute of Zimbabwe (CGAIZ) Annual Conference, the Head of the Corporate Governance Unit in the Office of the President and Cabinet, Mr Allen Choruma said Government is driving towards achieving total compliance to good corporate governance provisions, which is critical in enhancing economic growth in line with Vision 2030 targets.
“Zimbabwe sticks out from its regional and continental peers in championing corporate governance in the public sector, by having a well-defined legal framework that institutionalises and prescribes corporate governance standards in the public entities,” he said.
Mr Choruma said while the challenge remains in the area of enforcing compliance, applying sanctions for non-compliance, as well as providing incentives for compliance, there is a general reluctance to comply with the corporate governance legislative framework.
Despite these challenges, he said public entities have generally shown varying degrees of compliance with the provisions of this Act.
For example, Mr Choruma said the 2020 and 2021 Compliance Assessment Survey Reports conducted by the Corporate Governance Unit and targeted at State-owned enterprises and parastatals, show satisfactory levels of compliance with the provisions of the PECG Act.
Among the positive highlights from the report is that Zimbabwean public entities continue to improve their corporate governance performances.
Citing the report, Mr Choruma said the level of compliance increased from 55 percent in 2020 to 75 percent in 2022 as more entities scored above 50 percent while the number of chief executive officers in acting capacity reduced with gender balance on boards increasing from 33 percent in 2020 to 37 percent in 2021.
The report has further shown that 61 percent of entities produced annual reports and conducted Annual General Meetings as required by legislation while 76 percent of entities submitted asset declarations forms for board members, CEOs and senior staff and only five entities out of 104 had vacant CEO positions.
“These positive outcomes compare very well with regional, continental and international standards. One area that we are making significant progress in public sector governance is in the area of diversity and gender mainstreaming, given where we are coming from,” said Mr Choruma.
According to compliance assessment surveys conducted by the Corporate Governance Unit, he said public entities are showing varying degrees of improvement in gender mainstreaming in comparison to many African countries, in particular SADC countries, and even in comparison to European countries and the USA.
For instance, Zimbabwe is closing the gender gap in terms of board composition in public entities where males account for 63 percent and 37 percent females, up from 33 percent in 2020.
More females are also being roped in as board chairpersons, CEOs and company secretaries.
Mr Choruma said despite the positive outcomes cited above, the Corporate Governance Unit has noted some areas of improvement in terms of strengthening compliance monitoring and ensuring that compliance should not be taken as a tick-box approach, but rather as a voluntary exercise aimed at enhancing good corporate governance.
Other elements include embracing new best practices in corporate governance such as the sustainable development concept, training to improve the effectiveness of public entity boards, and ensuring that payment of salaries and benefits within provisions of model service conditions, among others.
Mr Choruma said Government established the Corporate Governance Unit in terms of Section 5 of the PECG Act and monitors compliance by public entities to the provisions of this Act and additionally provides a centralised support mechanism to all line Ministries to ensure strict compliance with the Act.
“The key CGU priority areas going forward are the following: ensuring that corporate governance in public entities is development-oriented, enhanced compliance monitoring, oversight over performance contract management, deployment of an E-Governance Platform (embracing technology and innovation to allow CGU to effectively monitor compliance), gender main-streaming across all entities and sustainable development,” he said.
Online Reporter