The Sunday Mail
Mrs Grace Pfumbidzayi
TODAY is the 16th day that former Air Zimbabwe group chief executive officer Mr Peter Chikumba and ex-company secretary Mrs Grace Pfumbidzayi are spending behind bars as convicted criminals.
(At the time of writing, determinations had not been made on their individual appeals.)
The grounding and incarceration of the former high-flying bosses was the culmination of a police report that was made on January 3, 2014 by the Air Zimbabwe board then chaired by Mr Ozias Bvute after a BCA forensic audit raised the flag on an intricate web of suspicious transactions between Air Zimbabwe and insurance brokers.
Air Zimbabwe could have been prejudiced of more than US$10 million.
The two executives were nabbed on the lesser charge of criminal abuse of office. On the face of the evidence presented in court, it was deemed that the allegations of fraud could not be sustained.
Navistar directors – Mr Givemore Nderere (managing director), Mr Vukile Hlupo (Navistar director) and Mr Orton Mawire (Navistar finance director and company secretary) – were all acquitted, but prosecutors are still studying the case with a view to appeal.
Mr Peter Chikumba
But it is Mrs Pfumbidzayi’s actions that raise serious corporate governance concerns, especially within public entities.
Her decision to skip some of the key procedures in engaging Navistar under unclear circumstances and making unsubstantiated payments to the same, were disguised as pure and noble fiduciary efforts to rescue the parastatal from collapse.
Notably, the airline’s disciplinary tribunal, chaired by lawyer Mr Wellington Pasipanodya of Manase and Manase, found Mrs Pfumbidzayi guilty of fraud and acting contrary to her contract of employment by facilitating inflated payments to Navistar between 2009 and 2013.
Her association with insurance broker Navistar, whom she engaged on March 18, 2009 without following procedures prescribed by law and company policy, also comes into question.
Colemont Insurance Brokers used to be the insurance brokers for Air Zimbabwe but they were sidelined also under unclear circumstances.
There was more muck that was unearthed.
Such practices where senior executives have carte blanche to conveniently disregard the rule book in the name of working in the best interest of the company – which most often is not the case – can only be tolerated by ineffectual boards.
Experts argue that the code of conduct needs to be straitjacket. Executives cannot work without parameters.
In the case of Air Zimbabwe, the board naturally pursued the case to its logical conclusion.
Similarly, the board of Mpilo Central Hospital in February this year roped in the services of PNA to audit tenders issued between January 2012 and February 2015.
The forensic audit became necessary after Mpilo allegedly cancelled a US$3 million tender to revamp the hospital’s cancer ward.
The tender had been won by New Planet, a company owned by Mr Ashton Mpofu.
Mr Mpofu, who has been named in a US$6 million tender fraud at Victoria Falls and Binga and is also accussed of a tender con at Mnene Mission Hospital in Mberengwa, made sensational allegations that Mpilo Hospital’s director of operations Mrs Duduza Regina Moyo wanted a bribe on behalf of the chief executive officer, Dr Lawrence Mantiziba.
Results of the forensic audit have since been submitted to the Minister of Health and Childwelfare, Dr David Parirenyatwa.
Post the audit process, Mpilo’s Mrs Moyo was again accused of awarding a defunct Bulawayo company, Landmark, a tender worth US$4 000 to supply urine bags.
Although no arrests have been made, it is the sheer determination of the board led by chairperson Mrs Sichelesile Moyo-Ncube to get to the bottom of the issue that is refreshing.
Corporate governance guru and former chairperson of the Institute of Directors Zimbabwe Mr David Mutambara said boards must be champions of good governance and have the ability to make organisations run in a predictable and sustainable way.
“In most cases the debate on good governance is only an issue when there is a huge public outcry or where some governance scandal clogs the lime light. “Most boards go into hiding and hope that the fire storm of public anger and scrutiny will ebb and life will then go back to “normal” and the “status quo” will find its balance and “business as usual” will continue as interest in good corporate governance runs out of steam and board accountability is forgotten.
“The boards, especially the head of that board, the chairperson, make a deliberate or inadvertent choice to practice or not to practice good corporate governance.
“Whatever this choice, this explains why the boards are accountable in the eyes of the law. In many organisations this relationship has resulted in a power struggle, an unnecessary struggle, between the organisational leaders.
“The antagonistic or laisse-affair relationship between the two leadership levels has contributed significantly to corporate governance failure.
“The irony is that this relationship is a very simple relationship which can easily be explained by lessons from sport.
“The board is like a referee in a game. The referee creates an enabling environment for the game to be played. The referee is not a player. A good referee has good control of the game but remains invisible in the game. A good referee blows for infringements and fouls and when necessary shows yellow or red cards. Those are the attributes of a good board,” said Mr Mutambara.
The bad apples
But this was not the case at the Zimbabwe Broadcasting Corporation, where there seemed to be an “incestuous” relationship between then board chair Mr Cuthbert Dube and suspended chief executive Mr Happison Muchechetere.
During his tenure at the national broadcaster, Mr Dube is accussed of making unilateral decisions without consulting other board members.
He is accused of unilaterally increasing the salary and allowances of ZBC chief executive officer Mr Happison Muchechetere to US$40 000 per month.
Instead of helping stabilising and growing the parastatal, the board in fact added to the hermorrhage.
In such circumstances, the board was made redundant and wasnot able to discharge its duties effectively.
It had to take the intervention of the shareholder, Government, to stop the rot by dissolved the board and naming a new one, which already has begun its work in earnest.
A forensic audit has since been conducted by Ernst & Young but the findings have not been made public as yet.
Just as he was bleeding ZBC, Mr Dube was also cleaning out Premier Service Medical Aid Society where he was earning as much as US$500 000 monthly in salary, allowances and other benefits.
Again, by ommission or commission, the PSMAS board was culpable.
The board subsequently dissolved itself after cutting salaries and board fees, retiring Mr Dube, appointing care-taker managers and reviewing corporate governance structures.
Experts argue that the board is the lead agent in the observance of corporate governance as the very act of appointing one is to address corporate governance deficiencies.
Added Mr Mutambara: “On the other hand, the CEO and the senior management are like the team manager and his team.
‘‘They themselves are not players as well but direct that the team strategy is executed.
“They may disagree with the referee but at the end of the day have to live with the referees decision.
“Where they remain obstinate the referee has also the authority to eject them from the game. The CEO and management are accountable to the Board.
‘‘This makes the board accountable for all the organisation’s governance.
“The final cog in the corporate governance wheel is the shareholder. They review the performance of each referee and decide on whether they are fit and proper to referee the next game.”
A fortnight ago Government and the private sector launched the National Code of Corporate Governance – ZimCode – to provide a “holistic solution to corporate failure and poor corporate governance”.
The code dovetails with the Zimbabwe Agenda for Sustainable Socio-Economic Transformation and is expected to be implemented by arms of the State.
ZimCode acknowledges that appointments to public office must be made primarily on merit and measures should be taken to expose, combat and eradicate corruption and abuse of office.
