As mentioned in one of my previous articles, valuations are undeniably the invisible scaffolding of modern economies. They determine the worth of companies, properties, and financial instruments, shaping decisions from boardrooms to trading floors.
Yet, the credibility of valuations rests not only on technical skill but on governance—the systems, checks, and responsibilities that ensure valuations are reliable, trustworthy, transparent, and aligned with the public interest.
In Zimbabwe, where capital markets are evolving and like the world over, investor confidence is paramount.
Governance of valuations is a shared responsibility meant to prevent manipulation, bias and errors to deliver market stability.
It largely involves the valuation firms, the entities commissioning valuations, capital and financial regulators such as the Zimbabwe Stock Exchange (ZSE), Victoria Falls Stock Exchange (VFEX), Insurance and Pensions Commission (IPEC), Reserve Bank of Zimbabwe (RBZ), and the Securities and Exchange Commission of Zimbabwe (SecZim). Each plays a distinct but interconnected role in safeguarding integrity.
Valuation firms are the first line of defence in governance. Their role extends beyond producing numbers. They must embed independence, objectivity, and professional rigour into every assignment. Strong internal governance means independence, standards compliance, quality assurance, and capacity building.
A cautionary case is the 2008 global financial crisis, where weak governance in mortgage-backed securities valuations contributed to systemic collapse.
Valuation firms that failed to challenge unrealistic assumptions became complicit in inflating asset bubbles. The lesson is governance is not optional. It is the profession’s licence to operate. The Valuers Council of Zimbabwe is therefore called to action.
- UK based Zimbabwean divorces wife of 33 years over conjugal rights
- New perspectives: Role of private sector in resource mobilisation
- New perspectives: Money laundering red flags in insurance sector
- 3 000 non-resident pensioners owed US$1.5 million, says Ipec
Keep Reading
Entities commissioning valuations which are the listed companies, insurers, banks, or corporates — also carry governance obligations.
They must define clear mandates, respect independence, disclose transparently, and procure responsibly.
Globally, governance lapses have shown the risks of poor commissioning.
Entities must therefore treat valuations as governance instruments, not mere compliance exercises.
Full article on www.theindependent.co.zw
Zimbabwe’s regulators demand valuations that uphold market confidence:
- ZSE and VFEX: require valuations underpinning listings, mergers, and acquisitions to be transparent, independent, and aligned with disclosure standards.
- IPEC: relies on valuations for solvency assessments and fair treatment of policyholders, demanding actuarial and valuation rigour.
- RBZ: Uses valuations in banking supervision and collateral assessments, expecting consistency and risk-sensitive methodologies
- SECZ: oversees valuations in capital raising and securities transactions, requiring governance structures that protect investors.
Internationally, regulators have acted decisively when governance fails. The UK’s Financial Conduct Authority (FCA), for example, tightened rules after misvaluations in investment funds led to liquidity crises. Zimbabwe’s regulators are similarly positioned to enforce discipline, ensuring valuations are not only technically sound but institutionally credible.
The governance of valuations can be visualised as a triangular alignment:
- Valuation firms: Uphold professional standards and independence with clear guidelines.
- Entities: Commission valuations responsibly and disclose transparently, setup valuation committees overseeing valuation processes and approving valuations.
- Regulators: Provide oversight, enforce compliance, and set clear expectations.
When this triangle is strong, valuations become instruments of trust. When it is weak, valuations risk becoming tools of manipulation. The need for regular monitoring and reporting valuation risks cannot be overemphasised.
A positive case study is Kenya’s capital markets, where strong governance of valuations in real estate investment trusts (REITs) has attracted international investors. Clear standards, independent valuers, and regulatory oversight created confidence in asset-backed securities. Zimbabwe can emulate such frameworks to position its markets as transparent and investable.
Valuations are not just numbers; they are governance signals. They tell investors whether markets are credible, whether companies are accountable, and whether regulators are vigilant. For Zimbabwe, strengthening governance of valuations is essential to attract capital, protect stakeholders, and build a reputation for transparency.
Valuation firms are custodians of integrity and must act accordingly.
Ends//
