State-owned companies were given till the end of October to submit financial statements for auditing in line with the recently approved Corporate Governance Framework that compels all 78 state enterprises to present audited reports.
State Enterprises and Parastatals minister Gorden Moyo said last Friday there has been a sudden urgency by parastatals to meet the set deadline.
“I gave a directive in August that within three months all parastatals and state enterprise’s chief executive officers should submit their salary structures for ratification.
“Also all parastatals should have their boards fully constituted by end of October (on Sunday). From preliminary reports the comptroller and auditor-general is inundated by demands from parastatals to get their financial statements audited to the extent that the auditor-general has sub-contracted private companies to help in checking the books,” said Moyo.
He said the move has also been necessitated by the fact that most parastatals had not had their financials checked in the past five years, thereby burdening the government accounting office.
However, Moyo did not disclose what measures would be taken on parastatals that failed to meet the deadline and what government had decided on the remuneration of CEOs.
According to the document, financials statements of state enterprises or parastatals should be audited annually by the Comptroller and Auditor-General or a nominee from that office.
A national code on corporate governance would be a major step for Zimbabwe in its effort to instill discipline and good conduct in corporates to balance the interests of companies, shareholders and communities in which they operate.
The national governance code covers such issues as board and directors, culture, ethics, values and development, integrated reporting and disclosures, government’s role and corporate governance, compliance and risk management and specific requirements for state owned enterprises.
The corporate governance framework was approved by cabinet on October 13 and is going to be launched in November, Moyo said.
He added that since issuing the directive, he is pleased that “some CEOs have been fired and boards suspended because the line ministries are following the government policy and all ministers are bound by it”.
“The potential of parastatals is that they can contribute 40% gross domestic product so half of the economy is with the 78 parastatals.
“But we had a situation whereby some individuals, people who created big untouchable monarchs, were milking these institutions with impunity for selfish parochial benefits,” said Moyo.
This year government projects an 8,1% GDP.
Government is currently drafting a Parastatals and State Enterprises Management bill that would provide for the codification of the corporate governance policy to give it legal force, said Moyo.