GOVERNMENT says it is tightening the regulatory framework to ensure compliance with governance in the public sector.
In 2018, the government promulgated the Public Entities Corporate Governance Act which provides for good governance of public entities and seeks to enhance accountability, transparency, performance and sustainable use of public resources.
In his keynote address at the Chartered Governance and Accountancy Institute in Zimbabwe (CGI) annual conference in Victoria Falls yesterday, permanent secretary (head) corporate governance unit in the Office of the President, Allen Choruma, said there was general reluctance towards compliance with governance regulations.
“We have laid down a number of measures. We are not going to tolerate mismanagement that compromises service delivery. If you don't deliver you are out. That is the reason why we are tightening the regulatory framework around compliance with governance,” he said.
“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.
“Our challenge remains in the area of enforcing compliance, applying sanctions for non-compliance as well as providing incentives for compliance.”
Choruma, however, said despite these challenges, public entities had shown varying degrees of compliance with the provisions of the Act.
For example, the 2020 and 2021 Compliance Assessment Survey Reports conducted by the Corporate Governance Unit (CGU), targeted at State-owned enterprises and parastatals, show satisfactory levels of compliance with the provisions of the PECG Act.
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The CGU Compliance Assessment Survey Reports for 2020 and 2021 show the compliance levels status of corporate governance in public entities.
Some of the key positive outcomes showed that the level of compliance increased from 55% in 2020 to 75% in 2022.
The report also showed that the number of chief executive officers in acting capacity reduced. Gender balance on boards increased from 33% to 37% in 2021, 61% of entities produced annual reports and conducted annual general meetings as required by legislation.
Choruma stressed that despite these positive outcomes, the CGU has noted the need to strengthen compliance monitoring and ensure that compliance should not be taken as a tick box approach but rather as a voluntary exercise aimed at enhancing good corporate governance.
He said embracing new best practices in corporate governance such as the environment, social governance, sustainable development concept and training to improve the effectiveness of public entity boards were areas of improvement.
The permanent-secretary said compliance needed to match or positively correlate with entity performance and service delivery.
“In the outlook, the CGU is pleased that the interventions of the OPC (Office of the President and Cabinet) is making in enhancing good corporate governance in public entities are starting to bear fruits with the impact noticeable in areas such as, accountable resource management, sustainability of entities and less reliance on Treasury support, reduction in fiscal risks, reduction in incidents of corruption, enhanced performance of entities and improvement in service delivery to the people of Zimbabwe,” he said.
The conference is running under the theme Attaining Vision 2030, Chartered Governance and accountancy professionals — Catalysts for Economic Transformation.