Victoria Falls – The Zimbabwe Secretary for State Enterprises Reform, Corporate Governance and Procurement, Mr Willard Manungo challenged the Zimbabwe corporate and public entities community to put the spotlight on ethics as a foundational tool to good corporate governance. In his key note address to delegates at an Ethical Leadership and Corporate Governance Workshop hosted by Ethics Institute Zimbabwe (EIZ) and attended by public and private sector representatives on the 14th of February 2019, Mr Manungo poured his heart out on the need for Zimbabwe to nip corporate scandals in the bud.
“The value of ethics and ethical leadership in our economy can no longer be overemphasized. Our corporate community has since the turn of the century gone through an arduous period characterised by scandals of one form or the other. From abuse of depositors’ funds by senior executives and shareholders in the banking sector, to rampant cases of rent seeking and embezzlement of funds in public institutions. And history shows that most of our attempts to improve adherence to good corporate governance in the country has tended to focus more on improving corporate governance per se without giving equal attention to ethics. Indeed, ethics is the foundation upon which good corporate governance is built, a position King IV Corporate Governance Code articulates quite instructively”, said Manungo.
This EIZ Ethical Leadership and Corporate Governance workshop comes barely two weeks after the Southern African country’s corruption watch dog – Zimbabwe Anti-Corruption Commission (ZACC) announced the resignation of its entire board on the 31st of January 2019 under unclear circumstances widely viewed by Zimbabwe’s media outlets as a clean-up exercise at ZACC by the country’s President, Emmerson Mnangagwa owing to ethical violations by the corruption watchdog.
The Zimbabwe’s Public Entities Corporate Governance Act was enacted in May 2018 and (Chapter 10:31) section 244 of this Act requires the Board of a public entity to ensure that it builds and sustains an ethical corporate culture in the company; it clearly articulates the ethical standards and ensures that the company takes measures to meet them; there is adherence to and measurement of ethical standards in all aspects of the business; a code of conduct and ethics-related policy is implemented; the company’s performance in regard to its ethics is assessed, monitored, reported upon and disclosed.
Parastatals and State Owned Enterprises contributed 40% to Zimbabwe’s Gross Domestic Product from the early 1980s to the early 1990s. These contributions have since dropped to an average of 10% per annum in 2018 with ethics and corporate governance being the major causes of a slumped public entities performance. Annual audit reports on parastatals and state owned enterprises by Zimbabwe’s Auditor General Mildred Chiri disclose corporate scandals, corporate governance mal-practices and ethical violations at public entities. Mildred Chiri assumed the role of Auditor General for Zimbabwe in 2004.
“While corporate governance is basically about rules and procedures, ethics speaks to the value systems of those corporate governance standards, forming building blocks for impactful and sustainable good corporate governance imperatives. An ethical foundation in corporate governance is decisive because it helps to build enduring corporate governance processes that thrive even in the most difficult of circumstances. And strong ethics intrinsically police the behaviour of every member of the organisation, from shareholders, company directors and senior executives in the board room, right through to employees at shop floor level,” Manungo explained.
According to the latest World Bank annual ratings, Zimbabwe is ranked 160 among 190 economies in the corruption rankings with a corruption index of 22.00 points, with an ease of doing business index of 155 out of a possible 190.The country stands at number 122 out of 190 on the competitiveness rankings. It is through practical reforms, strong legal systems, ethical leadership and corporate governance training and development that the SADC country can shake off the corruption tag and attract quality investments for a sustained economic growth.
In his closing remarks, Manungo emphasised that the high standards of ethical behaviour leaders are expected to exhibit do not simply come out of good morals as ethical leadership requires acquisition of ethical skills through ethical leadership training. He commended EIZ for developing an important ethical leadership training programme which clearly speaks to the Zimbabwe Government’s endeavours to turn around the performance of its public institutions and the economy at large – Ethics Institute Zimbabwe