OPINION: ZimCode heralds dawn of new era

12 Apr, 2015 - 00:04 0 Views

The Sunday Mail

Zimbabwe has now joined more than 70 other countries, worldwide, that have crafted their own national codes on corporate governance. Countries differ in terms of culture, values, and other factors knitting their respective socio-economic and legal fabric – which can only justify why we can’t have a one-size-fits-all code for all countries.

“Rejoice with those who rejoice and weep with those who weep,” is what the Word says in Romans 12:15. Two events of last Thursday left me with a better glimpse of what the above scripture means.

First, there was the conviction of Grace Pfumbidzayi, the suspended Air Zimbabwe company secretary, by a Harare magistrate for bleeding the national flag carrier of millions of US dollars in a fraudulent aviation insurance deal.

The “poor” mother of five broke into tears, appealing to the magistrate for the clemency of a non-custodial sentence so that she can “go back to (her) children”.

Thank God I am not a magistrate, as I would have likely been lenient.

Although I do not condone the crime she was convicted of, I really felt sorry for her. She was sentenced to 10 years in prison, three set aside, on the morrow of her conviction – what a black Friday for her!

Not very far away from the courtroom where Mrs Pfumbidzayi was sobbing pathetically, the very day that she was convicted, there was a different gathering – a joyful one.

The occasion was to celebrate the launch of the long overdue National Code on Corporate Governance, simply referred to as ZimCode.

ZimCode is said to provide a framework of corporate conduct for both the public and private sectors – don’t ask me whether the not-for-profit sector has been excluded or whether it has been left to self-regulate.

I am yet to read the Code, as I am still regaining my equanimity from rejoicing with those who were rejoicing and weeping with those who were weeping last Thursday.

What I can tell you is that for a country that has undergone several changes in both the structure and conduct of business, it cannot be business as usual.

ZimCode was, therefore, needed yesterday.

In my article in The Sunday Mail of May 18, 2014, titled “Corporate scandals call for systems rethink,” I pointed out that “we need a corporate governance framework that is compatible with the peculiar issues of Zimbabwe’s corporate landscape”.

I had observed that corporate scandals were still rampant despite the existence of pieces such as the antediluvian Companies Act as well as the alien King Code.

Zimbabwe has now joined more than 70 other countries, worldwide, that have crafted their own national codes on corporate governance.

Countries differ in terms of culture, values, and other factors knitting their respective socio-economic and legal fabric – which can only justify why we can’t have a one-size-fits-all code for all countries.

Why did it take us forever to realise that those international corporate governance frameworks we have been envying hitherto are walls that couldn’t hinder trespassers?

How many corporate scandals were we waiting to happen before we felt the compelling need to put in place these home-brewed systems?

Typically, an ideal corporate governance framework is not supposed to give room to corporates to sin and sob all the way to prison, as in the gloomy case of Mrs Pfumbidzayi.

It is supposed to be proactive, not reactive.

It must not leave a corporate in a vacuum, like leaving the cookie jar in the open with no one in sight.

It mustn’t take a “gotcha” approach.

It is supposed to be like a high voltage power-line, which even a very serious madman won’t even think of touching.

However, this is not to imply that the code must construct gates in every conduct of a corporate. There are aspects which simply can’t be traced and one can easily get away with.

Which is why I have always been arguing that the best corporate governance is not that which is articulated by a piece of paper but one’s conscience and commitment to always do the proper thing without being monitored or anticipating to be evaluated.

If ethics are observed in weird trades such as witchcraft, prostitution, wrestling or even wars, then how much more should learned professionals in the corporate sector uphold them?

Part of the reason why our economy is in this predicament is because of corporate governance decadence.

The cost of doing business and agency costs tend to be very high where there is no effective corporate governance framework.

That also becomes a huge barrier to foreign investment as investors won’t see meaningful return in investing in the country.

It has also been established that part of the reason why many companies end up filing for judicial management is poor corporate governance.

So, it’s not always the usual suspects of lack of working capital, and the rest of the items you can sing along from the catalogue.

It is very important for the Government to inculcate a culture of good governance amongst the citizenry by incorporating fundamental principles of ZimCode in academic syllabuses.

If these principles are instilled amongst would-be office bearers at an elementary stage, there are high chances that they will uphold high levels of ethical conduct when they get into positions of authority.

 

I am yet to read the Code, as I am still regaining my equanimity from rejoicing with those who were rejoicing and weeping with those who were weeping last Thursday.

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