Charamba’s memo to Shamu on ZBC rot | The Herald

via Charamba’s memo to Shamu on ZBC rot | The Herald January 21, 2014

To: Hon W. K. Shamu Minister of Media, Information and Publicity
From:  Cde G. Charamba Secretary for Media, Information and Publicity
Date: 1 November 2012
Re: State of Affairs at ZBC Report
On 23rdOctober 2012, I received a report from the CEO on “State of Affairs at ZBC”. It is his first report to me since his assumption of duties as a CEO at the Corporation. The report comes in the wake of a petition from workers alleging corporate malfeasances.

Presumably the same petition may have been tendered to the Anti-Corruption Commission, triggering the second factor behind the report, namely an investigative visit by the said commission.

Again, the CEO never formally advised me about the development. I got to know about it from the press. On 19th October, I also received a letter from the CEO in which he notified me of his resumption of duties after his trip to Iran, which trip was part of the Zimbabwe-Iran Joint Commission.

This followed my attempts at getting him to brief me on media reports on affairs of the Corporation. Only then did I get to know that he had in fact left for Teheran, leaving Cde Mandizvidza in post. I deplored the arrangement and urged the Acting CEO to advise the CEO that I did not find the arrangement responsible at all. My memo relates to the two communications.

Sir, after going through the CEO’s report, I advise that the report falls far short of enlightening the Ministry on “the state of affairs at ZBC” as it claims to do.

In fact, it is a misnomer to title the CEO’s report thus. His report reflects more on the state of the executive mind in relation to ZBC affairs than it does on ZBC as a body corporate. It is also overly defensive. In sum, it reduces the adversities on ZBC to:

The larger national politics;
Adverse macroeconomic environment;
The absence of Government funding;
The alleged financial debilitating interface with Government Departments and parastatals.

In its reckoning, the ZBC management is flawless, a position stiffly contested by ZBC’s workforce as represented by the petition. The language of the report is meant to make an impression politically. Yet the report is to an Accounting Officer who, whilst more than aware of the politics of the country, has not for a very long time been favoured with basic corporate reports on ZBC, as is required by law and best practices.

I have not been receiving audit reports on ZBC; minutes and resolutions of Board of Governors’ meetings; procurement reports; status reports and some such matters of corporate concern. Honourable Minister, I am not an inch wiser about the state of affairs at ZBC after reading the CEO’s report. I will highlight the weaknesses and shortcomings in his report.

Larger National Politics and ZBC
The Ministry is more than alive to the said politics. In fact, those politics have played out directly here in the Ministry, with you dealing with them aggressively and so effectively that all our information units, ZBC included, have gone largely cushioned from them. You have been confronted by Principals on Zimpapers, ZMMT, BAZ, ZMC and ZBC itself. You have been confronted by the responsible Parliamentary Committee on the same.

Indeed, you have been confronted by the Prime Minister and his Office on these same issues. In every instance, you have stood not just steadfast, but formidably by way of warding off political interference and pressures on all agencies under you, ZBC included. Outside that, pressures of a political nature which have been faced by all our agencies, ZBC included, are average and well within management competencies.

I don’t believe ZBC faces any more serious political challenges than have been faced by Zimpapers, including its radio station launched under a huge storm of controversy. What only differs is how the respective managements have handled those challenges. The CEO cannot build a case on such patently exaggerated threats which have, in any event, been absorbed by the parent                                                    Ministry.

More fundamentally, the apparent breakdown in labour relations cannot be explained by national politics at all. Lately, the workers have not been getting their full salaries as and when these fall due. This is what has raised a storm at the Corporation, not politics.

The nature of our politics nowadays is such that you will always have one or two staffers with oppositional tendencies. An effective management should be able to deal with such issues. And one most effective way of doing so is by removing adverse factors that poison industrial relations. ZBC management does not appear to have done that.

Quite the contrary, management is being viewed with mistrust by the unpaid workforce. It is viewed as profligate. And flying out of the country leaving behind an unpaid workforce does not suggest sensitivity at all.

Hostile campaigns against Government-related information agencies have been with us from as far back as 2000. Yet Zimpapers has overcome and even triumphed, including introducing and running its new radio station whose advertising revenue baulks this overly political interpretation which the report gives.

In fact, ZBC’s programming and marketing failures have given rise to a whole new industry of electronic billboards we see all over Harare. Instead of improving on its performance, or even joining in this new era of servicing the market, ZBC builds a new cost centre by way of an office in town. I was not formally advised of this project. I have not been favoured with an impact assessment of this decision. But from the sad financial tale of ZBC, I can reasonably surmise that its impact on ZBC finances has not been salutary at all. Sadly, the report before me shuns real issues internal to ZBC, including figures on the value of the town office, to enable me to assess the soundness of some of these executive decisions.

The specific instance ZBC CEO gives to back up his political interpretation of events is both tenuous and self-embarrassing. Three persons are said to have invaded ZBC premises with a view to unlawfully photographing its premises and assets. After a search, a business card of an MDC-T operative is found in the phone pouch of one of the accused. With due respect, Sir, I find it incredible that the CEO’s report seeks to place the fate of the whole ZBC on that small card, on that small evidence. If the trespassers had not come in, would ZBC financial fortunes and industrial relations have been any different?

What is worse, it turns out that one member of the CEO’s Executive had something to do with the three “trespassers”, who by the way, ceased to be trespassers given that they had the said Executive’s authority to enter ZBC premises. What is more, the three were being considered for a ZBC rebranding assignment, apparently without the knowledge of management. To then conclude, as does the CEO, that “this development exhibits the multidimensional political machinations at play” is, with due respect, astoundingly bald. The parent Ministry is a highly political office. It understands the politics of the country far better than does ZBC. Generally, I am suspicious of a management that overplays the hand of politics hoping to explain away adverse corporate matters. Management is there to run the corporate affairs of ZBC, while the parent Ministry deals with the politics of their environment. The two roles should never be transposed and Cde Muchechetere needs to be made to appreciate that vital point.

The CEO’s complaints about adverse, hostile or defamatory media reports have little value, if any at all. He runs a media outfit, the best medium in fact, and yet complaints about losing the information war against weekly newspapers! But it also indicates a poor response to an image problem building under his nose. The attempt at suing The Standard for a negative article was ill-advised, and I dissuaded ZBC from such an unthoughtful action. Incidentally, the CEO never approached this Ministry on the same matter, even though he was going to drag a Government concern into litigation. The rules are very clear: you don’t commit a concern’s money that way, let alone go to court, without the involvement of the shareholder. He did not even attempt to clear himself and his management to the shareholder on the issues raised by The Standard.

The Anti-Corruption Commission is a constitutional board whose operations are not based on “consent” of targets of investigations. Whatever its provenance or its composition, it is now an instrument of Government and the CEO is best advised to accept that the Commission is going to be a permanent feature in the oversight affairs of this country. He must also know that the Commission does not invite itself; rather, it is attracted by whistle-blowers, or by reports of adverse situations at State institutions. From what I get from media reports, the Commission was attracted to ZBC by the Corporation’s unpaid and complaining staff. It came in, in other words, as a result of a breakdown in labour relations. Also by just looking at the CEO’s attachments on the Commission’s visit, one hardly finds anything political in the interface. The Commission raised issues that even this Ministry would want to raise with ZBC management and the Board. ZBC cannot have remuneration structures which fall outside the framework given by Government through the State Enterprises Ministry. Or negotiate packages which weigh down the Corporation, packages which the organization cannot afford. Equally, ZBC cannot have internal tender processes which have not been cleared by the parent Ministry, especially if these cede disproportionate discretion to the CEO, and also appear to legitimize trade between the Corporation and its executives. Much worse, ZBC management cannot itself decide which major purchases go to SPB and which to itself (ref. attachment on the bus and BAW trucks).

Overall, in respect of the political interpretation of affairs at ZBC, one senses an unhelpful, in fact diversionary, smokescreen. We should quickly discount that in order to get to the real problem affecting ZBC. It is important that the CEO is made aware that the parent Ministry will not buy into such a ruse, and will instead ask hard questions on management and responsible deployment and use of scarce resources.

Absence of Government Funding
I am not very sure how far this issue goes in the mind of the CEO. His reference to Minister Biti’s false claims on allocation to ZBC in the 2012 Budget is of little value to the matter before us. By his own admission, ZBC has been rendered ineligible for budgetary funding by the Commercialization Act of 2001, well before he took over the reins of ZBC. He was appointed as CEO when that was already the case.
The issue of zero Government funding is thus not a new adversity, if one it is at all. Nor is the appropriate management response one of chaffing about it. It is for management to look at the whole Corporation with a view to matching the Corporation’s size to its means. Or growing those means to match its size, if the view of management is that size is sacrosanct.

He raises capitalization funding, correctly so, too. Except Government attempted to capitalize ZBC through the Iranian facility. That capitalization effort was vandalized by ZBC management, well before the current CEO’s time. To this day Government is haunted by that debt.

Presently, Government is working on recapitalization of Transmedia, itself a key factor to ZBC operations. Focus will shift to studios in the context of digitalization. The so-called new acquisitions which the CEO is making reference to, came through a Chinese grant, again an indication of Government’s awareness of the need to capitalize ZBC. I personally went to Iran on account of ZBC. The Iranians did an inventory of what they could do for ZBC. That communication was sent to ZBC. I have not got feedback on it.

Although I personally read incapacity on the part of Iranians who are already groaning under sanctions. But all these are small points. The real issue is that the CEO cannot raise the issue of capitalization to explain away ZBC’s recurrent expenditure related issues as if to suggest he has diverted working capital towards CAPEX. There is no evidence of significant Capex at ZBC, outside of vehicles whose distribution have always generated more controversies than efficiencies. The news side, itself the mission of ZBC, is virtually grinding to a halt while support branches of the Corporation receive inexplicable support.

The ratio of support staff to actual carriers of the ZBC mission, namely newsgathering, news processing and news presentation, loudly tells of an inordinately skewed manpower and therefore cost situation. ZBC has collected lots of fat on non-core areas, while paring to bare bones sections which carry its mission. This is a management issue, with no link to politics. We now have a digitalization tender document from ZBC dated 19th October, 2012, which we are looking at now, regrettably in an environment now poisoned by all sorts of allegations against management.

Relations with Government Departments and Parastatals
At the start of the COPAC process, the parent Ministry came under a withering attack for blocking COPAC from accessing free airtime from ZBC. The Ministry stood very firm in defence of ZBC, stressing any Government department wishing to use ZBC must pay up. That was upheld, forcing COPAC to develop a communication budget for the whole process. By that action, the parent Ministry laid down a principle on ZBC’s interface with Government departments and processes.

Even the parent Ministry itself has a standing instruction to pay for its messages and services handled through ZBC. Even the Ministry fleet pays listeners’ licence fees. If ZBC is owed by Government departments, it got so owed because its management, of its own accord, decided to extend a credit facility to those departments. Those who consent to injury must not be heard to complain. This is a business problem which must be approached as such. Management must recover its money, itself a core function of management. ZBC notices what ZESA has been doing. The CEO must be made aware that being owed by Government will not mitigate his failures. He authorized such a credit arrangement an must make good of it.

Honourable Minister, I find the CEO’s claims on parastatals astounding. ZBC owes BAZ and Transmedia stupendous amounts. Hardly two weeks ago, heads of both institutions were in my office to complain about ZBC’s non-payment. I bore down on them to give ZBC some breathing space. I find it surprising that ZBC now casts the first stone, as if its own financial dealings with sister parastatals is up to scratch. In fact, the decision to get ZBC to hire uplink facilities for galas was taken after ZBC repeatedly failed to meet Transmedia bills.

Equally, fees for uplink facilities charged by BAZ are statutory, apart from the fact that ZBC has not paid a single penny to BAZ, as required by the law. I cannot comment on what credit facilities it claims in respect of telecommunications.

Its relationship with ZESA and Powertel is a standard business relationship which cannot be brought in to explain anything related to the matter on hand. Extending services to Bulawayo, apart from being a ZBC mandate, should be a ZBC business development strategy. I find it strange that it is being presented in the report as a favour to Government, as a cost unfairly borne, or as basis for a mitigated judgment.
The CEO’s point on galas gets one really upset. In the first place the four or so galas a year we hold cannot explain ZBC’s woes. Secondly, these galas fall within the ZBC mandate of educating, informing and entertaining. Thirdly, galas are a big business opportunity for ZBC, apart from strengthening its bonding with its audiences and providers of content, the artists.

That such a huge marketing potential remains unrealized says a lot about ZBC management. That the CEO interprets a hugely popular project as a cost simply shows the depth of the failure. He is paying a whole marketing staff for failing to market an event which attracts thousands to actual venues, close to a million to the screen? I find that incredible. These galas are a permanent feature on the national calendar. Yet ZBC management does not have a marketing strategy for them, including the hours on end of usable broadcast material whose rights this Ministry has wholly ceded to ZBC. And for a channel with such huge gaps in advertisement slots, is it not clear that its marketing arm is moribund?

Again, the CEO’s report exculpates this glaring challenge in marketing, a challenge which has seen companies settling for outdoor static and electronic billboards, to a national one by way of the national broadcaster. As already indicated a political reading of this failure is lame and should never be entertained. Zimpapers has disproved this.

I fail to grasp the CEO’s point in respect of ZIMRA. Is he suggesting ZIMRA must change its rules to suit ZBC? The seasonality of ZBC business is not a new phenomenon. Even if it was – and it is not – ZBC management is paid to deal with the lows and highs of revenue, like any management in any enterprise. I find it strange that the CEO is using those very issues which necessitate the appointment of management in an enterprise to explain the bad state of affairs at ZBC. Every management knows its statutory obligations by way of taxes and duties. Every management knows business has highs and lows. But to try and bring these up as reasons for failure is, frankly, to exhibit little grasp of the role of management in an enterprise.

As a CEO, he must know what steps to take should he face problems related to ZIMRA. Zimpapers had similar problems with both ZIMRA and the Reserve Bank of Zimbabwe. They made a formal approach to the Ministry. We dealt with them in the course of periodic performance briefings which ZBC does not do at all.

I have no respect for a management which coughs up so many excuses when things have already gone bad. Where is the anticipatory role of management? And if it was not for this current crisis, when were these same points going to be made?

Lastly, after reading the CEO’s report, I am still not clear on the financial status of ZBC. Is it broke or not? Has it met its obligations to the workforce or not? Is it a going concern? Where are its audited accounts which it is required to produce by law, which it is required to submit to the parent Ministry, again by law? There is reference to audited accounts up to 2010. What happens afterwards? What is the viewpoint of the ZBC Board? Does it endorse its CEO’s report to me?
CEO’s Movement

It was quite poor judgment on the part of the CEO to leave for Iran at a time when ZBC was facing a major problem, including that of an unpaid workforce. The fact of having a Cabinet authority does not make travel mandatory, more so when new developments intervene. As was quite apparent, there was not substantive business for ZBC which really required the personal participation of its CEO.

The invitation was more for diplomatic reasons, rather than for substantive matters awaiting. In any event, an Iran with an unsettled debt, and in a situation of Western sanctions, is unlikely to extend any facilities to ZBC. It is this reckoning which got the CEO to shift his attention to the Chinese market for ZBC projects. He cannot be unaware of these limitations. It is for the same reason that I delegated, even though the invitation was to me personally. The decision to still press ahead with a trip in the name of invitation from Government (which by the way was done when I was away) in the face of real challenges to ZBC, really suggested poor judgment in my view.
Possible Way Forward

Honourable Minister, as a way forward, I propose that:
We set aside the CEO’s report on grounds that it is woefully inadequate and even diversionary.
We, at an appropriate time, get our audit team to move in as we did with New Ziana. Areas of attention must be clearly spelt out to the audit team. The outcome will give us a good status report on the Corporation. In the meantime, the CEO must be made to work on an external audit for the outstanding years. That would be a good benchmark for remedial interventions.

The CEO must be reminded of the standing rule of the Ministry requiring that yearly audits must be done and submitted to the Ministry in line with the Stock Exchange Standards and calendar. ZBC has no reason to fail to comply, what with such a bloated support staff.
Travel requests for ZBC staff, outside of those related to news gathering business, must, from now on be thoroughly re-examined.

Unnecessary travel must be curbed and T&S claims for all staff must now be aligned to those of Government. And whatever the circumstances, travel must only be authorized if it is shown that salaries for the impending month are in place. It is already happening in Government where travel authorization is subject to clearance by the Ministry of Finance.

That the CEO spends more time at ZBC and not on planes. Certainly he must be available to deal with adverse inquiries from the Anti-Corruption Commission. He must also favour the Ministry’s Financial Director with a monthly summary of ZBC’s accounts in order to enable the Ministry to keep a tab on the financial affairs of ZBC.

Communication between the CEO, the Board and the Ministry should be streamlined for good corporate governance. He does not report to the Minister. His Chairman does. He reports to the Secretary and does so as the top manager of a Government concern, not a conspiracy theorist. Of course, the Minister has the prerogative to invite him when he wants to. But that should never distort the clear reporting line.

A retreat involving the Ministry, the Board and management at which rules are read out, state of affairs at ZBC candidly dissected, and a way forward decided. Representatives of workers’ committee should be incorporated. We must make this retreat known, so the public gets to know that matters are being put right at ZBC. Above all, we must win the confidence of the workforce by showing a strong hand of oversight. That will minimize workers’ trips to the Anti-Corruption Commission.

ZBC’s digitalization programme should be discussed comprehensively, in the context of its overall corporate strategy.
At the end of all of the above, the Ministry should decide on an overall ZBC strategy, isolating those issues which must come to Government.

The Ministry must, with immediate effect, sit on ZBC Board meetings to keep in touch with affairs there. We are already doing that with Transmedia. I had asked Major Mutambudzi to do the same with ZBC.

The CEO must henceforth have weekly meetings with the Secretary until such time that matters stabilize. In the same vein, the Minister should have a monthly meeting with the Chairman of the Board at which both the CEO and the Secretary will be in attendance.

I recommend that this report remain internal to the Ministry. If it gets into irresponsible hands, it could be used to undermine the CEO’s authority. There are real, substantial shortcomings in the ZBC CEO. A positive attitude is to view these as genuine weaknesses requiring remedial intervention, not disciplinary action.

In any event, it would not be good to dispatch a Ministry team at the same time that the Commission is at ZBC. It might just add to the confusion and stress. The Ministry’s response should wait for the Commission to finish its own investigations and possibly present a report. However, certain administrative things should be undertaken immediately to streamline operations and to restore sound labour relations at ZBC.

Equally, the CEO will have to readjust his personality so that he rebuilds his image and regains staff trust. Presently he and his management have an image of persons who crave for a larger life, all at the expense of workers and sound management of ZBC affairs. That must stop forthwith. The real risk is to go to elections with a ZBC in confusion, without a cohesive workforce, and unable to discharge its existential function. Such a state would recall 2007/8, something we never want repeated.