Corporate governance draft still underway

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GOVERNMENT is in the process of drafting a piece of legislation to give effect to the National Code on Corporate Governance (ZimCode) which was launched early this year, a government official has said.

BY OUR STAFF

The Zimbabwe National Code on Corporate Governance (ZimCode) provides mechanisms for both private and public sectors of the economy to be governed. It also provides guidelines on director’s term limits, board appointments, corporate conflict resolution and settlement.

Speaking in Harare on Friday, permanent secretary in the office of the President and Cabinet Stuart Comberbach said that the Attorney-General’s Office was drafting a Public Sector Bill to give influence to the National Code on Corporate Governance and was expected to be ready in a few weeks time.

“My specific responsibility is corporate governance and State enterprises. That is a huge issue now, how to get these State enterprises, parastatals working properly so that they actually contribute towards GDP growth and the national economy,” said Comberbach.

“Part of the problem in our state enterprise sector is mismanagement and the issue of corporate governance. There is a direct correlation between good corporate governance, better productivity and more effective delivery of services.”

He said the Corporate Governance Bill will have a lot more focus on how boards are appointed, the qualifications of board members, and a much closer monitoring of the performance of the enterprises to make sure that they deliver on their mandated tasks.

Comberbach said government was currently working towards a stronger supervision required of line ministries over the corporate governance issues of the parastatals and State enterprises which come under them.

“You cannot have an efficient economy unless these parastatals deliver.

“Sadly most of them are struggling and part of what we do or trying to do is to look at how we can assist.”

In the 1990’s, the State enterprises sector used to contribute 40% to Gross Domestic Product (GDP) which has significantly decreased with the worsening of the economy in recent years.

“Parastatals are there to provide service such as electricity, water, telecommunications, roads, and transport so we know that there are a lot of challenges facing all of those sectors,” said Comberbach.

Corporate governance code globally have become major instruments for restoring public and investor confidence and in the promotion of sound management systems.