Concerning any organization that you are familiar with, evaluate the extent to which corporate
governance addresses the following pertinent issues:
(a) Integrity
Integrity is commonly described as a high moral virtue in a person. A person with integrity is
considered trustworthy, honest, courageous, and admirable person. In corporate governance, Integrity
is a principle that required that all those representing shareholders’ interest in agent relationships must
have and also practice. Failure to do so will breach the agency relationship. According to (Rozuel,
2006) ‘a, a lack of corporate integrity is akin to Corporate Social Responsibility window-dressing, and
leads to potentially damaging effects for the corporation and society alike.’
Public Entities Corporate Governance Act [CAP 10:31] section 57 noted that “In the discharge of its
role and functions every Board must conduct itself with honesty and integrity and, above all, must
always act in the best interests of the company.” This is also supported in the Zimbabwe national code
of corporate governance in chapter 3. Corporate governance has managed to address integrity issues
in many cases either as a deterrent or as a remedy.
In the case of Zimbabwe Broadcasting Corporation, the CEO used the corporation’s resources for his
use including funding giving himself hefty salaries and benefits. Due to financial mismanagement, the
corporation was unable to pay employees, and creditors and also to produce quality content. The CEO
acted in self-interest which amounts to a lack of integrity. The ZBC scandal is an example of bad
governance as the Board was unable to deter the Senior Management’s unethical behavior. According
to (Kyereboah-Coleman & Biekpe, 2006) “Bad corporate governance has proven to lead to the
collapse of State enterprises”. The Board become also part of the scandal by receiving hefty
allowances. The suspension of the Board and the CEO improved the state of affairs at the corporation.
A scandal like this propelled the setting up of the Integrity Committees at Public institutions which in
2021. Its main task is to “prevent corruption and promote good corporate governance at the
institutional level”.
The corporate governance of OK Zimbabwe has managed to address integrity issues through Board
composition. The inclusion of 6 independent non-executive board members is key as they act as
guides to improve corporate credibility and governance standards. This helps to deter issues of
management and board members acting in self-interest.
(b) Transparency
(Maroun, 2014) Described Transparency as one of the three critical pillars of Corporate Governance.
Transparency in simple terms just means nothing to hide. A company must conduct its dealing in a
way that is observable to outsiders. A company must always make necessary disclosures, complies
with legal requirements, and informs shareholders of its decisions. Public Entities Corporate
Governance Act [CAP 10:31] section 15 noted that “Public entities should observe a high degree of
transparency towards all shareholders.”
Corporate transparency aids governance effectiveness, information disclosure, and reduced
corruption, corporate disclosure, and remuneration disclosure. Governance effectiveness can be
achieved through feedback on the board’s policies, feedback is a result of free-flowing information.
Transparency also helps to reduce corruption as all business dealings are traceable and are done in a
manner that is clear to everyone. (Transparency International, 2022) stated that “To fight corruption,
we must embrace transparency. As it is about knowing who, why, what, how and how much”.
Ok, Zimbabwe ltd as a ZSE-listed company has managed to address transparency issues through
mandatory financial reporting every half year and at the end of each financial year-end. The Board has
made sure that the management releases the information when it’s due. The board through the Audit
Committee that meets twice a year, advises the board about corporate governance and regulatory
issues. The Audit committee insures that financial reports meet the accounting standards and also they
are internally and externally audited. The financial reports are made available to all stakeholders in an
understandable form. According to (Barth et al.., 2008) “Regulatory accounting reporting and
transparency regulations are ways to achieve financial reporting quality to improve understanding of
financial statements information.” The availability of OK Zimbabwe enables the company to be
evaluated and the board to perform more efficiently.
(c) Accountability
According to (Chen, 2019) “accountability is the non-financial commitment of a public company.”
Accountability ensures that the company’s performance is not only limited to financial performance.
The company must be accountable to all stakeholders including communities and employees.
Accountability increases the stakeholder’s confidence in the company. The company’s board must
also be faithful to all its stakeholders in its assessment of the business performance through accurate
reporting and meeting other non-financial commitments.
In this era where Governments and environmentalists are trying to find a way to reduce carbon
emissions, a business must also be responsible for the consequences of their operations. Despite the
inaction of regulations that try to make companies accountable for the negative impacts of their
businesses, corporate governance makes sure that companies are accountable for these issues.
According to OK Zimbabwe Company Secretary (Munyuru, 2022) “OK Zimbabwe is committed to
operating a business that is conscious and accountable for its environmental, social, and economic and
governance impacts. This stems from the fact that the control of impacts in these areas is critical for
the continued existence of the Group and societal survival in the long term.” For example, in the
recent rehabilitation of Ramon road where the OK Zimbabwe warehouse is located, the road was
mainly damaged by their trucks.
Corporate governance addresses accountability issues by communicating its decisions to the
shareholders and stakeholders of the company. Shareholders and stakeholders should also be able to
understand the decision-making process of the company. This will make them make their judgments
about how to associate with the business. The audit committee of Ok Zimbabwe is important as it
demonstrates accountability in the company’s reporting on key business issues like preparing
financial accounts and risks.
(d) Fairness
Fairness means treating all people equally. Fairness at shareholders entails that all shareholders either
minority or major are treated the same. (Trust, 2014) Noted that “the fairer the entity appears to the
stakeholders, the more likely it is that it can survive the pressure of interested parties.” For example
all customers must feel that they are all given the some care as any other customer, and also
employees must also feel that the employer treats all employees the same. Fairness is an important
principle of corporate governance.
In many boards in Zimbabwe achieving fairness is a difficult thing. Financial interest and politically
affiliation makes fairness difficult. Despite having fiduciary obligation to the company in many cases
board members have acted in self-interest or in the interest of the shareholder which they represent in
that board. For example in Parastatals like ZESA, were the Government through the Ministry of
Energy and Power development are responsible for board appointments. The appointments have been
questioned in many cases and same appointments were a violation of the Public Entities Corporate
Governance Act (2018). The Act (Part 3 Section 1) states that “no person shall be re-appointed to a
board if he or she has already served on that board for one or more periods, whether consecutive or
not, amounting to eight years.” Such board appointment compromises the fairness of the members in
making big decisions for the company.
OK Zimbabwe has manged to addresses issue of corporate fairness by having three non-executive
board members. It also involve independent entities for fairness opinions to assess key transactions.
The Ok Zimbabwe board takes into account the provisions of the Public Entities Corporate
Governance Act and the ZimCode which helps to improve corporate governance practises in the
company. According to (Amicus, 2020) “ZimCode employs an ‘apply or explain’ methodology,
meaning that Boards must consider whether to follow each recommendation, based on the best
interests of the particular company.” Through these Zimcode provisions OK Zimbabwe has managed
to keep good corporate governance.
(e) Social responsibility
Corporate social responsibility is how the company approach their interactions with their external
environments from providing quality products and services, to undertaking charitable activities.
Outstanding corporate governance and corporate social responsibility are key to the success of the
company. (Soonawalla, 2005) Suggest that CG and CSR are two sides of the same coin. As part of
corporate governance companies must design strategies to make sure that their operations are ethical,
societally friendly, and beneficial to its community. Corporate Governance Framework for State
Enterprises and Parastatals section 6.13 states that all SEP must have clear CSR plan and they are also
mandated to give an annual CSR report. This is to ensure that the SEP are adhering to law, ethical
standards and international norms.
OK Zimbabwe board through the CEO who also sits in the board has managed to solve issues with
Social responsibility by adhering to the Public Entities Corporate Governance Act (2018) section 130
(b) which states that ‘the company has a corporate culture that promotes sustainable ethical practices,
encourages individual integrity and fulfils the social responsibility objectives and imperatives of the
company’. The company has what is called corporate sustainability which has 3 pillars which are
Environmental, Social and Governance. The company is committed to operating a business that is
conscious and accountable for its environmental, social, and economic and governance impacts. This
stems from the fact that the control of impacts in these areas is critical for the continued existence of
the Company and societal survival in the long term. The company is involved in many social activities
such as sponsoring marathons, donations, tree planting events and infrastructure rehabilitation.
Social responsibility benefits the business as much it benefits the communities. It creates a positive
image for the company, it builds customer loyalty, promotes creativity and agility, it promotes
employee engagement and satisfaction, it improves the bottom line and attracts investors and it also
helps the company to connect with the communities. According to the survey by (Crifo, 2015)
‘employees in CSR firms may show higher levels of dedication and success at work than market
wages to other workers.’