The Zimbabwe National Chamber of Commerce (ZNCC) has accused local companies of unscrupulously pursuing “supernormal profits” to finance unsustainable affluent lifestyles by their boards, to the neglect of business ethics and good corporate governance.
The business representative body also challenged government and civic society to “name and shame” poor-performing state-owned enterprises (SOEs) and proposed a strategy to inculcate a corporate governance culture in the public entities.
In a position paper titled From Stability to Economic Growth – A ZNCC Proposition, the chamber said both the private sector and SOEs were guilty of moral degeneration accentuated in rogue business practices as well as glaring salary disparities between executives and shop-floor workers.
“There is overwhelming evidence that boards in the public and private sector have abandoned universally accepted business practices, sacrificing corporate ethics on the altar of reckless expediency.
“A feeling prevails that as business, we have been overwhelmed by a sense of survival at the expense of good governance.
In this category we have supernormal profits, salary disparities and moral degeneration.
“Citizens and customers have also faltered in not applying their critical mass to call boards to account, giving such boards freedom to reign unchecked.
What else would explain parastatal boards and management living in luxury while their entities go bankrupt?” reads part of the document.
Last week, State Enterprises and Parastatals minister Gorden Moyo said his ministry was in the process of compiling a report to be tabled before Cabinet detailing the state of affairs at state-owned companies.
ZNCC said it was committed to setting up and enforcing a framework of rules and practices by which a board of directors can be held accountable to stakeholders.
“Apart from the government itself setting a good example of good corporate governance, they can evoke and enforce a whole battery of legislation to influence behavior of public companies,” said ZNCC.
“There are several institutions that monitor the application of corporate governance, albeit voluntarily.
Orientation courses, name and shame are other means of ensuring standards of governance remain high.”
The chamber urged a marked paradigm shift by all stakeholders, government, business and labour, saying this would chart a mutually-shared approach to re-entrench macroeconomic fundamentals and strengthen capacity recovery.
ZNCC also said business had to recognise that the era of hyper-ventilated profits is no more and inefficiencies could no longer be cushioned by speculative bubbles.
The chamber said expensive lifestyles were no longer sustainable under the current dispensation.
“The country needs a policy framework that supports enterprise and innovation by reducing bureaucracy and cost of doing business, a policy framework that attracts inward investment and focuses on restoring confidence in the economy, and a policy framework drawn from consensus that entrenches and strengthens recovery and growth fundamentals,” ZNCC said.