Good afternoon Ladies and Gentlemen
I am glad to announce this afternoon, that the Government of Zimbabwe (GoZ) as of yesterday, Wednesday the 13th October 2010, approved a Corporate Governance Framework for State Enterprises and Parastatals.
The Corporate Governance Framework will guide and inform State Enterprises and Parastatals stakeholders. The adoption of the Corporate Governance Framework (CGF) is a significant milestone, in our quest to transform state owned enterprises into viable and well run institutions. The Corporate Governance Framework will be implemented in tandem with the Companies Act, the Public Finance Management Act and enabling Acts of Parliament governing State Enterprises and Parastatals.
State Enterprises and Parastatals are varied in nature and there is “no one size” fits all corporate governance solution. However there are basic universal governance principles and values, which every SEPs needs to fulfill in order to achieve set objectives and increase shareholder value. These principles are include but are not limited to the following: accountability, responsibility, transparency, fairness and ubuntu.
In summary, the overall objective of the Corporate Governance Framework is to achieve better company performance, higher profitability and efficiency levels, and increased investor confidence in SEPs which will eventually lead to improved shareholder value and improved services for the people of Zimbabwe.
Specifically, the objectives of the Corporate Governance Framework, among others, are:
• To improve efficiency and effectiveness in State Enterprises and Parastatals
• To clarify relationships and reporting structures between Responsible Ministries, Boards and Management;
• To provide for transparency, role clarity in terms of responsibilities; and accountabilities;
• To provide for performance agreements, monitoring and evaluation of performance;
• To minimise conflict of interest; and
• To provide for clear reporting and communication requirements.
Practising Good corporate governance comes with it a lot of benefits some of which are:
• Provision of increased transparency in corporate structures in operations of organisations
• Reduction of external interference and conflict of interest.
• Role clarity, accountabilities and responsibilities for stakeholders.
• Enhancement of operational efficiency
• Enhancement of investment potential through increased investor confidence.
As has been seen the world over, SEPs are critically important in the development of economies. In Zimbabwe, as has been said before, SEPs have the potential to contribute about 40% of GDP and to spearhead economic growth through the provision of such utilities as energy and water.
Our SEPs are in the forefront of infrastructure development in the energy, water, transport and telecommunications sectors. These are the critical enablers that drive the productive sectors of the economy. In a developmental state, SEPs, also provide the necessary leverage for Government interventions to spearhead development.
The Corporate Governance Framework for State Enterprises and Parastatals will be launched later this year, at an event to be attended by senior government officials, heads of SEPs and other stakeholders. Induction Training for SEPs board members and management will then be rolled out.
It is the conviction of the government, that the CGF will create a new management culture and paradigm for our SEPs and improve the development of the economy as a whole. It is a welcome idea for our SEPs to set benchmarks that will be used by other similar organizations in the region.
May I conclude by saying, that the mere putting in place of a framework is not the end of the road nor does it necessarily follow that compliance will be automatic. A lot more work has to be done and that journey will require the cooperation of all stakeholders in building a culture of good and responsible citizenship.
Finally I would like to quote my favourite verse;
“Finally brethren, whatsoever things are true. Whatsoever things are honest, whatsoever things are just, whatsoever things are pure, whatsoever things are lovely, whatsoever things are of good report, If there be any virtue; and if there be any praise, think of such things and work for such things”. I will add believe in such things and work to achieve them(Philippians 4 vs 8)
I thank you
Honourable Gorden Moyo
Minister of State Enterprises and Parastatals
14 October 2010
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