via Govt limits terms for public executives, bans permanent secretaries from boards | The Source March 4, 2014 by Bernard Mpofu
Government has banned heads of public enterprises from holding office for more than eight years, and bureaucrats from sitting on boards of such companies in a bid to improve corporate governance.
“Mr Speaker, Sir, with regards to the chief executive officers appointment and performance, cabinet has decided that CEOs and other senior management in state enterprises, parastatals and heads of local authorities be put on performance contracts,” finance minister, Patrick Chinamasa told Parliament on Tuesday.
Corporate governance at state-owned companies has come under spotlight in recent months after disclosures of executive compensation at several institutions showing that some earn monthly salaries running into hundreds of thousands of dollars.
Many are riddled with debts, corruption and mismanagement with some executives staying on for more than 20 years.
Finance minister Patrick Chinamasa, who is also the as chairman for the cabinet committee on parastatals, state enterprises and local authorities said the executive had adopted a new corporate governance framework to effectively manage government entities.
“CEOs should enter into four-year employment contracts which may be renewable once. The contracts should clearly spell out the minimum requirements, which if not met, should constitute grounds for termination of service,” he said.
The boards will now be required to evaluate the performance of the chief executive on a quarterly basis and appraise the responsible minister.
Interviews for prospective heads of public companies will now be carried out by the board and a professional human resources company.
Permanent secretaries would now be banned from holding positions on the boards of such companies.
“No permanent secretary should be a member of a public enterprise board, but that ministers should appoint appropriately qualified and experienced persons from their ministries to sit through deliberations of the board and to report to the ministry the gist of the board’s deliberations,” Chinamasa said.
CEOs will also be required to report directly to the permanent secretary on a regular basis including all significant decisions taken by management.
The finance minister said the new measures will also bar executives from serving on more than two boards of public enterprises. The new framework also compels state enterprises and parastatals to hold annual general meetings, which should be attended by representatives from the office of the president and cabinet, treasury, the parent ministry, the auditor and comptroller general and other stakeholder ministries.
He said the cabinet committee on state enterprises and parastatals development will oversee the forensic audit of all parastatals and local authorities.
“Subsequent measures will be taken to deal with the more complex issues of salaries, allowances and procurement practices of public enterprises and local authorities,” Chinamasa said.
COMMENTS
“Government has banned heads of public enterprises from holding office for more than eight years, and bureaucrats from sitting on boards of such companies in a bid to improve corporate governance.”
What’s good for the goose; is good for the gander. If term limits promote good governance for a parastatal, so will then for the country.
Coming from where things have been, these measures are a step in the right direction.
Its a nonsense and an attempt at a cover up. Leaders of industries including state enterprises and parastatals should have no time limit. they should however be audited on a regular basis, exectutive salaries must be in the public domain and results published quarterly.
Zombi, you are right… but, will they adhere to it? Expect many variances to be allowed. Much is about who you know… and what you know about their activities.
There is no honor among thieves… but there is self-preservation.
These are the very basic requirements for the proper functioning and accountability of any entity. No wonder with Zanu PF in charge, no AGMs, governance structures, proper position descriptions with SMART objectives, checks and balances to ensure effectiveness and return on investment for stakeholders and the country. Animal Farm was definitely written with Zim in mind. Too little too late comrade minister. We thought that you knew these basics already?
NOW THE BLINND CAN SEE! THAT WAS ZANUPFS FOLLY!
Ever had of re-cycling, these executives will stay at one enterprise for 8 years and move on to the next enterprise. Bob has perfected re-cycling just look at his cabinet.
Chinamasa is an ass, there is more to corporate governance than what he is proposing. Gordon Moyo former Minister for Sate Enteprises produced a workable Framework on Corporate Governance for Sate Enterprises and Parastals based on RSA King 111 and Sarbenes Oxyley Act of USA but this was never given the nod by Thief-in-Chief Bob. So dont hoodwink us with your presumptions you blasphemous arrogant un-votable loser
so what will happen to those like Charamba who stole? They will jsut be banned and life goes on? I guess its the expected. They will be offered some other vanues to corruption through the back door. We cant defeat this patronage system, I guess.
Zanu has no will to implement any reforms, since this will retard the main aim which is looting and designing new ways of looting.
It is a step in the right direction but those convicted of fraud etc like Dube must not be allowed to hold any position of authority for life.
@ Nyoni i hope yuu are right. I can already hear Zanu pf saying”you have 8 years only. You had better steal quickly” My point is they appointed these people and authorized the salaries. I cannot see a person just awarding himself such salaries. They should tell us what salaries they started on at apointment. It has all to do with the Ministries.
One does not need to guess-this will never be implemented comrades
this will encourage the CEO’s to negotiate a higher salary to maintain their lifestyles later on
its a pity.
since around 1997 this government has been talking of performance management, now it turned into results based management and now its called integrated results based management (IBRM)and the economy has been falling. someone fools the president that IBRM will miraculously change the economy and he looks excited about it. all the government ministers have been there as nothing has changed, things instead have become worse. its truly disheartening.