The Institute of Directors of Zimbabwe (IODZ) says troubled quasi-government entities have no capacity to publish their financial results within the stipulated time frames due to a number of factors.
Parastatals have come under fire for their failure to publish results and hold annual general meetings as required by the law.
The State-owned enterprises are expected to publish their results every March.
Speaking at a two-day IODZ workshop that began in Harare yesterday, executive director Edward Siwela said parastatals had missed several deadlines to comply with government directives.
He said the country was facing the major challenge of brain drain, which affected the parastatals’ ability to publish the financial results on time.
Siwela said in the past there was a challenge of resources as the country had no capacity to audit all the parastatals, but government empowered the Comptroller and Auditor-General to appoint independent auditors.
He said it was not ideal for company chairpersons to also act as chief executive officers of the same entity, as if a company did not have a strong board. Siwela said minority shareholders were bound to suffer in such a scenario.
He said it was advisable that shareholders be neutral to represent the interests of everyone.
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“The chairman should be an independent minority shareholder and the chief executive officer must not be the chairman as he will at some point represent certain interests while others will suffer,” Siwela said.
Last month, Finance minister Tendai Biti said Treasury was working on major amendments to the Banking Act that will bar shareholders from being in both executive management and the boards of banks in a bid to strengthen corporate governance.
He said the government was considering adopting corporate governance principles as defined by South Africa-based guru Mervyn King.
