The Corporate Governance Summit Zimbabwe began on Monday, 28 September 2009, at the Crowne Plaza Monomatapa and was well attended by all representative sectors of Zimbabwe’s economy.
Zimbabwe has started the process to create a new corporate governance code at what clearly seems to be an opportune time: The main motivator is that Zimbabwe needs capital – and corporate governance is a pre-requisite attracting funding.
The speakers at the one-day summit were:
- Mr Canaan Dube, Chairman, Zimbabwe Leadership Forum (ZimLef)
- Honourable Mrs Thokozana Khupe, Deputy Prime Minister of Zimbabwe
- Professor Mervyn King SC, Chairman of the King Committee on Corporate Governance in South Africa, and Vice President of the South African Institute of Directors
- Mr Nqaba Mkwananzi, Partner Business Risk Services, Ernst and Young Zimbabwe
- Mr Shepherd Shonhiwa, past Chairman, Institute of Directors of Southern Africa
- Mr David Mutambara, President, Institute of Directors (IOD) of Zimbabwe
- Mr Eliah Mutowo, Permanent Secretary, Ministry of State Enterprises and Parastatals
- Mr Nyasha Zhou, Chairman, CZI Committee on Business Ethics
- Mr Tinashe Rwodzi, Territory Senior Partner Zimbabwe and Malawi PricewaterhouseCoopers
Organisational Issues
The development of the code is inclusive and will solicit feedback from all stakeholder registered, i.e. multi nationals, local companies, parastatals and state-owned enterprises, SMEs and the informal sector.
The steering committee to drive the process is currently being constituted: The IOD will look at the key issues at hand and then decide what structure would best respond to those issues. The intention is to have a small, but effective board with access to a full supporting cast of sub-committees. It is anticipated to have completed the new Code on Corporate Governance Zimbabwe by 30 May 2010)
The private sector is expected to be the main driver of the formulation process, and key corporate private sector sponsors to this initiative are Delta Corporation, First Banking Corporation and TA Holdings. The Institute of Directors Zimbabwe and the Zimbabwe Leadership Forum will provide additional support.
Additional buy-in is expected from other corporate entities in Zimbabwe. Addressing the challenge of how to garner high level support from key decision makers in the process, the past chairman of the Southern African Institute of Directors, Mr Shoniwa, said the South African process targeted high powered individuals and invited them to become conveners and advisors. In addition, prominent organisations were invited to participate directly in the process and obtain buy-in. Lastly, a consistent publicity policy was pursued.
The funding of this new initiative is intended to come from the private sector, mostly in kind: members of the steering committees will be offering their time and effort for free. The experience of the IOD of South Africa is going to be tapped once the steering committee has been appointed.
Conceptual Inputs
Is there a difference between African and European corporate governance? How would an African solution differ a European one? David Mutambara responded by suggesting that there was no contradiction in the objectives of both. If anything, the West, through international governance codes, was actually teaching Africans the concept of “ubuntu” of traditional African governance philosophies.
David Mutambara’s presentation provided a very level headed insight into the practicalities of developing a governance code and the tendency of key participating executives to put their individual company objectives ahead of national interest. This conflict creates dissonance, especially when a new governance code is being developed, so he suggested it was important to ensure that the concept of “national interest” was well defined. Mr Mutambara also pointed out that a replication of process that governs the development of a national constitution is not going to be in the interests of the code development process: The intense time pressure requires a balance between broad consultation and expediency.
Recommendations by Professor Mervyn King SC
The Zimbabwe Leadership Forum and the IOD Zimbabwe secured the participation of Professor Mervyn King SC who flew from Europe to Zimbabwe (and straight back to Europe) to provide guidance to everyone following the launch of King III earlier this month. He is an excellent speaker and his speeches have begun to address environmental issues more prominently as time goes on. Not surprising given that has spent some time with Al Gore recently.
Shedding light on the process of developing King III in South Africa, Prof. King had a few tips for the IOD and ZimLef in Zimbabwe:
- King III can be used as a guideline by the Zimbabwe initiative, but should not be merely copied: It is essential that parties participating in the Zimbabwe process first lists the special circumstances surrounding governance in Zimbabwe and then determine how these are to be integrated into any governance code.
- It is crucial that the main steering committee carries out its work through sub-committees (King III had eleven sub committees, manned by 90 people in total, representing various stakeholders)
- Prof King advises to obtain wide buy in from all sectors of the economy: unions, societies, stock exchanges and others. Failure to do so had been the reason for the ineffectiveness of the previous code on corporate governance.
- Concentrate on the ensuring that the individual is the focus of corporate governance.
Professor King emphasized that Zimbabwe would not be able to legislate “competency and honesty” and that the “comply or explain” philosophy underlying codes in many other countries should be adopted in legislation, not as a code.