Salutations
Chairman of the Board of the National Code on Corporate Governance, Mr. Canaan Dube
Chairman of the Steering Committee of the National Code on Corporate Governance, Mr. Tinashe Rwodzi
Chairpersons of the various thematic committees
Workshop participants
Observers
Members of the media
Ladies and gentlemen
It gives me great pleasure to be with you this morning as you familiarize yourselves with the code drafting project for the National Code on Corporate Governance, albeit several months into the project.
No one needs to be reminded that Zimbabwe is a country that is blessed with God given natural resources including minerals, tourist attractions and human capital. It follows that we should be enjoying benefits of these endowments.
For a number of reasons Zimbabwe is not performing to expectations.
The background of rapid de-formalisation, hyper inflation and isolation resulted in a shift in the way we do business in Zimbabwe
The most prominent and worrying of outcomes are the moral decadence and bankruptcy and the associated plethora of unethical behavior that we have witnessed in both formal and informal sectors of our economy.
Most businesses, state enterprises and NGOs degenerated resulting in eventual collapse with devastating economic and social costs consequently.
I am reliably informed that it was against this background that the concept of crafting a National Code of Corporate Governance was developed. The intention is to ensure that the country’s businesses, be they in the private, public or NGO sector have efficient management systems, efficient control structures and strike a balance between economic and social goals with a greater corporate conscience and accountability.
The overall aim of the project is to ensure that not only are resources utilized efficiently, but that boards act in the interests and expectations of their company and shareholders whilst at the same time reducing the risk of financial crises. There is a need to ensure that there is accountability of a board and key overseeing management for the stewardship of resources. Therefore, there is no doubt that in any organization, private or public, good corporate governance is ultimately about effective leadership.
Corporate governance in any enterprise is primarily a function of three things, namely;
• Direction and leadership
• Risk management and control
• Accountability and reporting ie the provision of a true, fair and accurate account of the stewardship of the enterprise in a transparent manner to those with a legitimate interest.
We are all aware that practicing good corporate governance will restore investors’ confidence and this will enable us as a country to attract investment, gain access to external financing and grow sustainable institutions which our country so desperately needs.
One of the essential features of sustainable institutions with sustainable performance is their integration of economic, social and environmental performance.
Zimbabwe thus joins a growing list of countries with their own codes of corporate governance including South Africa, Malawi, Kenya, India and China among many others.
My Ministry is finalizing a framework for good corporate governance for all State Enterprises and Parastatals as part of measures to enhance their performance and viability. Our efforts and the work of the National Code Drafting project are in no way contradictory, rather they are complementary and this shows the importance that the Government of Zimbabwe is attaching to issues of good corporate governance.
Government’s determination to revive our economy has seen us take a decision to restructure parastatals which has been preceded by classifying parastatals into three groups which determine whether they will be commercialized, restructured or privatized. This will pave the way for Government to retain its role of providing policy framework.
Ladies and gentlemen, this concern provokes the perennial debate on whether the government can run a business enterprise successfully? More often it has been claimed that governments are generally interested in control at the expense of efficiency.
My humble submission to this debate is that it is not necessarily government ownership that hampers the efficiency and effectiveness of state-owned enterprises. In stead it is ineffective government control that hampers the efficiency and competitiveness of public enterprises.
By this, let me not be misconstrued for calling of micromanaging and meddling in the running and management of parastatals. Far from it,I am merely drawing your attention to the changed matrix and paradigm shift in how our Government is approaching matters.
It is now performance that underpins Government’s interest in what is going on in public enterprises. Inevitably, the success of state enterprises depends on striking the appropriate balance between control and accountability on the one hand, and, performance and entrepreneurship on the other. This, in our view, is ultimately the objective of good governance.
Your efforts are therefore very timely considering Government’s thrust on indigenization. Indigenization, appropriately implemented, should breed success not spell the doom of yet another enterprise …I am interested in what the Thematic Committee on Culture, Values, Ethics and Development will discover about us, and what promotes and hinders our quest to perform in this area.
It is therefore pleasing to note that the people of Zimbabwe as represented by the august membership in this room, not only share the same sentiments as their Government, but have taken their own initiative to champion this worthy cause.
You will agree with me Ladies and Gentlemen that Government has a critical role to play in establishing the economic and political fundamentals that underpin economic growth and in facilitating the practice of good governance, not only for public enterprises but for private business as well.
Let me reiterate the commitment of Government to continue in creating and ensuring a stable environment conducive for business.
I am optimistic that this seminar will inform, integrate and strengthen members in their endeavour to develop the National Code on Corporate Governance.
With these few words I officially declare this workshop open. I thank you. Siyabonga. Tinotenda. Taboka.
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