Good Corporate Governance In Public Entities
Appointment of the board (Public Entities Act 10:31)
- Appointments to all tiers of government including government institutions (Parastatals) and other public enterprises MUST be made primarily on the basis of merit.
- No person shall be re-appointed to a board if he or she has already served on that board for one or more periods, whether consecutive or not, amounting in the aggregate to eight years.
- A person shall not be appointed to the board of a public entity if he or she is a member of two other such boards
- Members of boards of public entities shall be appointed for their knowledge of or experience in administration, management or any other field which is relevant to the operation and management of the public entities concerned.
- Parastatals are now subject to good governance with regards to the new provisions of the National Code on Corporate Governance and the King Code.
- New provisions require parastatals to conduct operations so as to maintain commercial viability and abide by generally accepted standards of good corporate governance.
- Companies wholly owned by the state must establish transparent, open and competitive procurement systems.
With the new regulatory frameworks being issued by The Reserve Bank of Zimbabwe, the appointed members of the board are expected to upkeep with the changes, be able to maintain the companies’ commercial viability despite the economic challenges Zimbabwe is currently facing.
Benefits of good corporate governance
With a good corporate governance framework in place, supported by a healthy corporate culture, the organisation should see direct benefit. Risk is controlled, procedures are streamlined and consistent. These benefits include:
- Efficient processes
- Visibility of errors – repeatability and consistency quickly highlight nonconformities in the processes.
- Reduced costs – repeatability and consistency eliminate waste from scrap, rework and other costly inefficiencies.
- Smoother-running operations – ‘fire-fighting’ is eliminated and operations are either ‘conform’ or ‘non-conform’.
- Compliance is assured – with a culture that supports corporate governance and products in the market – product that reaches the market meets the intended specifications and works correctly.
Good corporate governance begins with appropriate appointment of the board.