Parastatals to hold annual general meetings

via Parastatals to hold annual general meetings | The Herald September 28, 2015

Parastatals and public enterprises will soon be required to convene annual general meetings where a review of their financial statements will be conducted, among measures to promote transparency and good governance. This will be contained in the Corporate Governance Bill which is being drafted and outlines procedures for the appointment and remuneration of management.

Finance and Economic Development Minister Patrick Chinamasa told the National Assembly last week that crafting of the Bill was at an advanced stage and that it would be brought to Parliament soon. He said this in response to a question by Matabeleland North proportional representation MP Ms Ruth Labode (MDC-T) on what Government was doing about abnormal salaries being given to top management at parastatals.

“I can confirm that work is advanced to produce a Bill and it’s one of the Bills that were brought to this House by His Excellency (while opening the Third Session of the Eighth Parliament),” said Minister Chinamasa.

“The Corporate Governance Bill will address not only this (issue of salaries), but the need for AGMs and the process to be followed when fixing the terms or conditions of service because in the current scenario, they were fixed solely by the chairperson or chief executive, without the knowledge of the board.”

Most parastatals and enterprises’ operations are opaque with very little known to the public, especially their financial well-being. This has resulted in rampant abuse of public funds and resources to the benefit of a few individuals in top management. It was revealed last year that former Premier Service Medical Aid Society chief executive officer Dr Cuthbert Dube’s got a salary of more than $500 000 per month and this led to an avalanche of disclosures that showed a similar pattern at other State enterprises.

Top managers at ZBC and local authorities were also exposed to have been earning huge salaries at a time most of them were struggling to pay workers on time and had arrears for several months. Government and the private sector last year adopted the National Code on Corporate Governance Framework as part of measures to fight corruption and abuse of resources.

The requirement for parastatals and public enterprises to hold AGMs will also open the organisations to scrutiny by the public. The Corporate Governance Bill is among the 22 Bills expected to be presented to Parliament during the current session to make the country favourable to foreign investment.