November 21, 2013
By Nelson Chenga
Zimbabwe’s struggling economy risks further weakening under the weight of corporate failures that have so far turned the country’s key industrial heartlands such as Bulawayo into scrap yards, a central bank governor has warned.”Such risks are ever before us even today. We have seen companies teetering on the verge of collapse largely due to corporate governance failures and others may not even recover despite the efforts that are underway to resuscitate them. These corporate collapses have had a huge impact on our economy and I believe this state of affairs needs arresting,” the deputy Reserve Bank of Zimbabwe governor, Khupukile Mlambo, said last week. [EXPAND Read more]
Addressing chartered secretaries and administrators in Harare, Mlambo said given the gravity of the threat, the Zimbabwe government is swiftly moving to publish a national code on corporate governance.
“I believe (the document) was crafted following our painful experiences with corporate failures as a result of shortcomings in board processes over the past two decades,” said the deputy governor, citing cases whereby people lost their pensions and life-time savings, banks collapsed and insurance contributions vanished following dollarisation.
Commending the Institute of Chartered Secretaries and Administrators in Zimbabwe (ICSAZ) for introducing annual awards that seek to cultivate a culture of good corporate governance, Mlambo said good business ethics was central to protecting shareholders’ and workers’ interests as this promoted transparency and accountability.
And as the country enters a new era of accountability, Mlambo advised the nation to guard against having “systematically too-big to fail” financial institutions because the social cost of such institutions failing are evident in the recent global financial crisis.
Speaking at the same occasion, ICSAZ president, Glovar Madzima, said corporate governance had now evolved into a critical discipline for the survival and growth of companies and will also be a major factor in helping to turn around Zimbabwe’s economy.
“We are convinced that sustainable turnaround of the Zimbabwean economy can only come about if you, as corporate governance practitioners and captains of industry and commerce, uphold principles and practices of good corporate governance in running your organisations,” said Madzima. [/EXPAND]