The Sunday Mail
Although the fundamental goal of corporate governance is to foster optimal success of organisations, the failure of this system can have adverse financial, social, economic and political consequences.
Despite the existence of international corporate governance frameworks such as King Code, which is said to be the most effective summary of the best international practices in corporate governance, in Zimbabwe, we have continued to witness rampant corporate scandals both in the private and public sectors, high levels of corruption and other malpractices. We have heard about the salary gate scandal which prompted Cabinet to come up with guidelines on remuneration. All this happened right before the watchful eyes of the King Code.
Cecil Madondo, a judicial manager who has managed more than 25 companies under judicial management, is on record saying that most liquidations and judicial managements are caused by “gross mismanagement and lack of effective corporate governance.” Spare the usual suspect — the liquidity crunch mantra. When the King Code trap is failing to catch rats, it calls for us to rethink the efficacy of our systems.
Just a couple of weeks ago, Japan’s most powerful business lobby, Keidanren, was mulling to introduce a new system of corporate governance rules which will require better disclosure. This shows how we have to also continuously sync our corporate governance systems in line with the dynamic environment. When a trap fails to catch a rat, then it’s either there is something wrong with the trap itself or the rat has become clever. Either way, something has to be done. Should we just sit and watch this corporate decadence worsening by the day in Zimbabwe?
We need a corporate governance framework that is compatible to the peculiar issues of Zimbabwe’s corporate landscape. One that can precisely checkmate and hold by the horns all the corporate scandals that are prone to Zimbabwe particularly. Such thinking has already been mooted by the Institute of Directors of Zimbabwe, although I don’t know why it’s taking forever to implement.
It is high time for Zimbabwe to have its own national code for corporate governance that is inspired by our very own socioeconomic landscape. Monkeys in the Amazon are different from monkeys in Zimbabwe, which means that their behaviour and requirements are also different. Why should we therefore treat our monkeys like monkeys in Amazon? More than seventy countries have already crafted their own national corporate governance codes. It has been close to half a decade now since the country’s corporate sector mooted the idea of crafting a national code for corporate governance. We hear that its long overdue launch is now imminent. We are tired of reading corporate scandal after scandal while this home-brewed document is lying overdue in its mother’s womb. Doesn’t the mother of this long overdue baby feel the pain at all? We now fear for a stillbirth.
Given all the time that the Institute of Directors of Zimbabwe has taken to craft the national code for corporate governance, I believe it will perfectly fit in our corporate landscape, like jigsaw puzzles. I am sure that it will also receive buy-in from stakeholders,because of the participatory approach that was taken in its crafting process. This stakeholder ownership is essential in that it will give the code the sacrosanctity which it requires for it to be revered in the religion of business. This national code may not be flawless, but I like the fact that it comes with a real-time monitoring and evaluation mechanism, which means that there will be room for us to learn from our errors. Like what one pan-Africanist, Mwalimu Nyerere, said, independence is the “freedom to make our own mistakes.”
A few months ago we have seen the launch of the country’s five year comprehensive economic blueprint, Zim-Asset, which has been welcomed by industry and commerce. The president of Confederation of Zimbabwe Industries said it’s a “bold and ambitious document that challenges industry to action.” Yes, Zim-Asset has put the industry on the spotlight, as one of its four clusters focuses on beneficiation and value addition. However, can the industrial paradigm being proposed by this “ambitious document” be achieved with the corporate governance systems’ status quo in the private sector? In fact, are the current corporate governance systems compatible to the aspirational dictates of Zim-Asset? Aren’t they holding Zim-Asset to ransom?
The existing foreign-crafted corporate governance frameworks have proven to be sabotaging Zim-Asset, given the appalling corporate scandals that took place under its stewardship, and that cannot be tolerated any longer. If we don’t want Zim-Asset to be like the Industrialisation Development Policy, which is almost expiring without achieving anything, we have to bring a complete overhaul to our corporate governance systems.
We have to flush the alien corporate governance codes down the drain as they have proven to be futile and sterile in our context, and pave way for our own home-brewed code.
Above all our corporate executives should also remember that true corporate governance is fundamentally not enforced by a piece of paper, but by your natural conscience as an executive. We should cultivate a culture of honesty, integrity and upholding the highest degree of ethical conduct. If ethics are observed in trades such as witchcraft, prostitution, and wrestling or even in war, then how much more should learned professionals in the corporate sector uphold them?
The issue of corporate governance is surely not like that of elephants’ affair — whereby if they fight, the grass suffers; and if they make love, the grass suffers still. We surely can reap positive results by coming up with a good home-brewed national code for corporate governance.
