ZSE companies contravene governance code

A SURVEY on the corporate governance practices of companies listed on the Zimbabwe Stock Exchange (ZSE) has shown that a significant number of public companies are in contravention of the Zimbabwe National Code on Corporate Governance (ZimCode). Launched in April 2015, ZimCode provides a corporate conduct framework for both the public and private sectors, which covers many subjects including disclosures related to sustainability reporting and remuneration of directors.

The survey, conducted by the Institute of Chartered Secretaries and Administrators in Zimbabwe (ICSAZ) between August and October 2017, set out to find out whether board practices adhered to Zimcode and international best practices.

The investigations covered 15 major topics in connection with board governance practices, including board selections, recruitment and composition; board leadership; board evaluations; audit committee and board remuneration matters.

Another major finding was that 54% of companies did not have a policy on social media to be used by employees, management and the board showing that many firms are lagging behind on this key change in the business environment.

The findings revealed that 31% of the boards of the 61 listed companies were yet to disclose remuneration packages as required by the code.

“About 67% of boards had remuneration committees to review the directors’ compensation. About 69% of all boards disclosed executive and non-executive directors’ remuneration separately,” the survey report revealed.

“Both, the ZimCode and King IV report, advocate for such a committee. It is also expected that all boards should disclose the directors’ remuneration separately for executive directors and non-executive directors (NEDS)

“According to the King IV report, many international and institutional investors are paying additional attention to disclosure and voting on remuneration. In order to foster accountability on remuneration, King IV report recommends including definite disclosure, among which, that remuneration should be disclosed in three parts, namely a background statement, an overview of the policy and an implementation report.”

Listed entities had 500 board seats cumulatively, according to the 2017 Zimbabwe Quoted Companies Survey conducted annually by Zimind Publishers, which publishes NewsDay, The Standard and Zimbabwe Independent.–newsday.co.zw

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