Corporate governance experts have bemoaned the increase in cases of unethical business practices on the local industry and have called for the speedy crafting of the national code on corporate governance if the country is to realize increased investment and maximisation of shareholder value.The past few years have seen an upsurge in cases of corporate governance deficiency on the local industry.
This is evidenced by several boardroom squabbles, abuse of depositorsâ€™ funds by financial institutions and deliberate disregard of good business practice resulting in lack of investor confidence in many of the listed firms.
Vice Chairman of the National Code on Corporate Governance project, Mr. Johannes Mudzengerere believes there is urgent need to foster accountability, innovative leadership and ethical behaviour on the part of board members and directors of listed firms.
Some of the cases which rocked the local market include the recent boardroom squabble at Hwange Colliery, the Rainbow Tourism Group (RTG) shareholdersâ€™ dispute over board appointments, Renaissance Directorsâ€™ abuse of depositors funds, Econet Wireless Zimbabwe (EWZ) legal and financial advisorâ€™s conflict of interests among other cases.
Founding Director of Corporate Governance Watch Trust, Dr. Lovemore Matipira stressed the need to speed up the crafting of the national code on corporate governance so as to minimise conflict of interests in the management of firms and to ensure that there is safeguarding of shareholdersâ€™ interest.
While other regional countries including South Africa and Malawi have in place sound national code on corporate governance, Zimbabweâ€™s code has been on the cards for a long time amid a dispute on whether the framework should be voluntary or legally binding.