THE outdated Companies Act came under the spotlight at last week’s KPMG second audit committee forum meeting on Thursday last week.
Various speakers expressed concern over the flaws in the Act, which has failed to curb corruption.
Philippa Philips of Philips Law and a technical consultant for the review of the Companies Act gave an update on the status of the Companies Bill to amend the Companies Act as well as key changes to the companies legislation.
She also participated in the panel discussion on the same issue and garnered participants’ interest when she spoke of the issue of board renewals and promotion of gender and age diversity of current boards in the country which sometimes appeared as what she called “old boys clubs”.
Renowned lawyer and one of the key individuals behind the National Code on Corporate Governance (ZimCode), Canaan Dube, contributed on how the Bill should incorporate elements of corporate governance.
Dube, who is also Delta Corporation chairman, responded to participants’ questions on the level of compensation for non-executive board members, highlighting that good skills at that level would need to be compensated appropriately for the best value.
Standard Chartered Bank Zimbabwe Ltd legal counsel and secretary to the legal committee of the Bankers Association of Zimbabwe Nqobile Munzara commented on how the current Bill needed to work hand-in-hand with various legislation in the financial services sector to ensure harmony.
Zimbabwe Investment Authority chairman Nigel Chanakira clarified how certain provisions of the Bill had been specifically included to improve the ease of doing business in Zimbabwe.
Under the current Companies Act, over 600 000 companies were registered in some cases with no proof of residence of the directors. Due to such flaws in the current regulation, it was noted that too many fraudulent activities had occurred that otherwise could have been prevented by robust legislation.
The audit committee forums aim to provide audit committee and board members with practical insights, resources and peer-exchange opportunities focused on strengthening oversight over financial reporting and audit quality and corporate governance as well as how to address the array of challenges facing boards of businesses today.