President Emmerson Mnangagwa has placed limits on the terms
of office of chief executives and board members of State enterprises and
Parastatals (SEPs), while also binding them to performance contracts.
Appointments will be on merit, and board members will be
dismissed if they fail to draw up a strategic plan, or fail to comply with it.
Permanent secretaries are no longer allowed to sit on the
boards of public entities, and remuneration has been capped for appointees.
These provisions are contained in the Public Entities
Corporate Governance Act, which was gazetted on Friday.
A Corporate Governance Unit, a department in the Office of
the President and Cabinet, is being established to monitor and evaluate the
performance of public entities and their leadership, with its head holding the
same rank as a Permanent Secretary.
Bosses at SEPs will have to declare assets and business
interests exceeding $100 000 to the Office of the President and Cabinet, and
failure to comply will result in disqualification from working as a senior
officer or to on the board of a public entity.
Board members will serve for a maximum of eight years, no
one will sit on more than two boards, and the primary basis for all
appointments will be merit.
Ministers are required to notify the Corporate Governance
Unit, in writing, and the justification for the appointment.
Payments to board members will be premised on the the
entity’s financial capacity and the standards observed at organisations of a
similar size and nature.
Board members will not be allowed to access loans or any
other credit facility from SEPs, and anyone in breach of this will be fined
and/or imprisoned for a year.
CEO’s will be appointed on merit via an interview process,
be evaluated annually, and serve for a maximum of 10 years.
Section 17(1)(c) reads: “ … no chief executive officer
shall, even if his or her performance has met such standards, be re-appointed
after the tenth annual review, unless the President’s approval of the
re-appointment is obtained.”
Similarly stringent conditions apply for other senior
executives at SEPs.
The total remuneration and benefits bill should not exceed
30 percent of the organisation’s revenue or operational budget for the prior
year.
Section 22(1) of the Public Entitites Corporate Governance
Act says, “The board of every public entity shall, in accordance with this
section, draw up a strategic plan for every public entity for which it is
responsible, to (a) set the entity’s objectives and priorities for a period of between
two and six years, as the board may decide.”
The Corporate Governance Unit will compile a report on the
SEPs sector by October 1 of each year, and Government should present it in the
National Assembly for scrutiny within 30 days.
President Mnangagwa has made SEPs reforms a priority of his
economic turnaround programme, and Government has started merging, realigning,
strengthening and liquidating entities.
Last week, Vice-President Constantino Chiwenga said, “A
robust SEP sector is key to the country’s efficient allocation of resources,
competitiveness, economic development, and poverty alleviation.
“Against this background, it is common cause that the
economic performance of some SEPs in Zimbabwe has deteriorated to unacceptable
levels where decisive action to turn them around or close them down if they are
of no strategic significance have become necessary.
“The SEPs, therefore, need to operate in an environment
where good corporate governance practices prevail. SEPs should be subjected to
effective oversight and enforcement in order to maximise their contribution to
the competitiveness and development of the Zimbabwean economy.” Sunday Mail
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