CORPORATE governance failures have been at the heart of Zimbabwe’s economic problems, as shown by the rising tide of corruption, incompetence and mismanagement. To prevent risk and make effective and profitable decisions, companies and public institutions need comprehensive governance frameworks. However, policy analysts say that while there has been no shortage of rhetoric on the need to ensure good corporate governance, practical action has been sorely lacking. The Institute of Chattered Secretaries and Administrators in Zimbabwe (Icsaz) has over the years embarked on various initiatives to encourage good corporate governance in the country through its professionals. Zimbabwe Independent business reporter Melody Chikono (MC) spoke to Icsaz president Letitia Gaga (LG, pictured) to unpack these and other issues. Below are excerpts of the interview:
MC: What have been the major achievements of the institute over the years?
LG: We have made significant progress over the years with major achievements including the fact that we now offer a Diploma in Forensic Accounting (DFA), with the first group in its final stage. Our Public Sector Accountancy Capacity Building project is now ready for implementation. We have also launched the Corporate Secretaries Toolkit, which is designed to assist company secretaries in both the public sector and private sector on company secretarial issues and good corporate governance. We also introduced the Great Zimbabwe University Collaborative Programme at Master’s level and introduced the Bachelor of Science Special Honours by the same university. We also launched the capital-raising project, which is an ongoing project aimed at proffering business solutions according to business needs. We have also introduced the Excellent Corporate Governance Awards.
MC: What are your major focus areas in the coming year?
LG: We are looking at consolidating the projects I mentioned above, especially coming up with more collaborative programmes at degree — honours and master’s — levels across the borders in the coming year. We are also going to work with relevant boards so that the Corporate Secretaries Toolkit course is taken by most company secretaries.
MC: What are the main challenges being faced by your professionals in various organisations?
LG: Like any other organisation, our professionals are faced with a myriad of challenges, but our main concerns hinge on the misunderstanding of employers on what the role of a company secretary in an organisation really is.
To this end, our professionals end up having to compromise their work ethics to suit their new defined roles. The company secretary is responsible for the efficient administration of a company, particularly with regard to ensuring compliance with statutory and regulatory requirements and for ensuring that decisions of the board of directors are implemented. Despite the name, the role is not clerical or secretarial and this needs to be understood. We also have financial directors, CEOs and accountants, among our members.
We have also noticed that some employers and the government are not serious about corporate governance, which compromises our profession.
MC: How are your chartered secretaries equipped to deal with political influences that detract from good corporate governance?
LG: The chartered secretaries are equipped to deal with political influences that encourage good governance practices through good ethical behaviour and we encourage them to go by the book or rules.
MC: From your perspective, where is Zimbabwe in terms of corporate governance practice?
LG: Zimbabwe is improving, but we still have a long way to go in terms of corporate governance practice. It is quite unfortunate that the political and economic environment is not helping, but it’s actually perpetuating the culture of corruption as people seek shortest ways to strike deals. This includes paying middlemen and other means which are not ethical.
MC: What measures should be put in place to enhance good corporate governance in Zimbabwe?
LG: Corporate governance involves leadership. It therefore points to the fact that those in leadership positions, politics and business should shun corruption and bad corporate governance practices. Generally, the tone at the top influences what happens on the shop floor. The leaders should be consistent in applying corporate procedures in order to eliminate favouritism, nepotism and the other vices.
MC: What are the main challenges being faced in upholding corporate governance?
LG: The main challenges being faced in the country in upholding corporate governance mainly hinge on issues of policy. Policies can be put in place, even corporate codes and laws. However, the issue is on how they are implemented. As long as the leadership at both government and company level are not consistent and leading by example, the policies will remain good on paper, but with no effect.
MC: What are you doing as an institute to address policy gaps in Zimbabwe?
LG: To address the gaps that are left out by the policy in Zimbabwe, the institute has been at the forefront in fighting for good corporate governance. This is why we introduced the Excellence in Corporate Governance Awards. The institute also regularly runs corporate governance seminars around the country and has lectures at some universities to instil good governance principles at an early age.
MC: Some commentators say the failure by local companies to adhere to good corporate governance practices is stifling efforts to attract fresh capital for retooling. Is there any truth in that?
LG: It is true that good capital is attracted by “good governance practices”. In this environment where most companies are looking for capital, it is necessary for the country and companies to practice good governance. This will enable us to attract investors.
MC: You have organised a Capital-Raising Conference. What do you seek to achieve and of what value is it to the economy?
LG: The Capital-Raising Conference is meant to bring together funders and those seeking funding. If our organisations are able to attract funding, then they will be able to start new projects or retool and produce goods at optimum levels, meaning that the country will be able to be competitive thus earn more foreign currency or reduce the need for forex as goods can be produced locally.