The much anticipated Public Entities Corporate Governance Bill will soon become law, amid indications that it is ready for its second reading.
The bill has hyped optimism across various sectors of the economy as it is viewed as a clear and bold step by the government in regulating corporate governance standards in state enterprises and parastatals.
Speaking at a stakeholders’ workshop on guidelines focusing on enhancing board effectiveness and performance management in Harare today, Finance Minister, Dr Ignatious Chombo indicated that the reality of this has less than two months.
Once signed into law, the bill is expected to tackle issues around remuneration caps for both board members and senior employees, as well as restricting their terminal benefits.
The law will also introduce performance ratings for each public entity, and performance based contracts for all senior executives, developments expected to enhance transparency and accountability.
Following a corporate governance survey conducted last year, a litany of weaknesses were identified which affected the performance of public entities.
The underperformance of public entities and parastatals continues to present concerns for the government with revelations that an overall loss of $270 million was recorded by 38 surveyed commercial entities last year.
The worrying fact is that out of the 93 entities in the country, 70 percent were either technically insolvent or illiquid.