IAC 2014 Annual Conference
Corporate governance & ethics
Eve C Gadzikwa
Director General, SAZ
Chairman, IoDZ
ZSE, Chairman
Presentation Structure
General Principles
 Defining corporate governance
 Defining ethics
 Conclusion

PRINCIPLES
• What causes our downfall in business is usually
failure of ethics, governance, customer care, lack
of care for the environment and
unprofessionalism in the way we perform our
roles, responsibilities, duties and functions.
• It is not so much what we do but how we do it.
• How we perform our roles must be based on a set
of business ethics, morality and professionalism
principles
• Our choices determine our behaviours
Common threads
CG and Ethics have the following
common characteristics;
• Both are developed over time
• Have intrinsic value
• Can cause irreparable damage
What is corporate governance
“A system by which companies are directed,
controlled and held to account
Boards of directors are responsible for the
governance of their companies.
The shareholders’ role is to appoint directors
and auditors….”
[Sir Adrian Cadbury 1992]
What is corporate governance
“Good corporate governance is essentially
about effective, responsible leadership.
Responsible leadership is characterised by
ethical values of responsibility, accountability,
fairness and transparency.”
[King III, 2009]
Cont..
7
What is the Aim of Corporate
Governance
It is “concerned with holding the balance
between economic and social goals. …the aim
is to align as nearly as possible, the interest of
the individuals, corporations and society,”
[Sir Adrian Cadbury]
Corporate governance rationale
“Good corporate governance helps
(organizations) operate more efficiently, improve
access to (funding), mitigate risk and safeguard
against mismanagement.” IFC
Elements of good corporate
governance
Good board practices
 Effective controls
 Transparent disclosure
 Board commitment

Pillars of corporate governance
Accountability- for decisions and action
 Fairness- treat all shareholders the same
 Transparency- timely and accurate
disclosure on all material matters and
decisions
 Responsibility- 3 Ps for long-term
sustainability

Agency And Stewardship
12
SOURCES OF CORPORATE
GOVERNANCE
LAW
For this presentation :
•
•
•
•
The New Zimbabwe Constitution
Companies Act (“Cap 24:03”)
Compliance with the law is compulsory
Corporate governance premised on the law operates
on a “comply or else” basis.
CODES
• Most developed countries and those in emerging markets
have adopted best practice codes, e.g. Combined Code in the
UK, Cromme Code in Germany and the King 1, 2 & 3 Codes in
South Africa, and
• In Zimbabwe:
– Corporate Governance Framework for State Enterprises &
Parastatals (CGF for SEPS), November 2010
– The National Code on Corporate Governance Zimbabwe
(“Zimcode”) – awaiting launch.
– CGF for SEPs – a derivative of the Zimcode.
Ethics
16
UBUNTHU
• “I am because you are and you are
because we are” =UBUNTHU.
• A person with integrity says “I will
do exactly what I say I will do, when I
say I will do it.
• If I change my mind, I will tell you
well in advance so you will not be
harmed by my actions”.
ETHICAL DILEMMA
• On one hand the shareholder who provides risk capital
naturally needs to look after the investment by participating in
managing and directing the business resulting in power being
concentrated in one person or small group of persons.
• Power therefore needs to be balanced among shareholders,
managers and Boards of Directors through an appropriate
scheme of checks and balances.
Acting ethically entails:
• Responsible deliberation and action, i.e.
meeting our own needs and requirements in
ways which do not compromise the needs and
requirements of others-the triple bottom line as
in three Ps-profit, people and planet. see King
III Code.
• Obeying the law, keeping one’s promises, telling
the truth, and being true to one’s values.
DISCLOSURE ON REMUNERATION
Dilemma:
Every company should provide clear disclosure
of it
remuneration policies, level and mix of
remuneration, and the
procedure for setting remuneration, in the
company's Annual
Report.
CONCLUSION
a.
b.
“The difference between moral and immoral leaders is as
sharp as the contrast between light and darkness, between
heaven and hell” by Parker Palmer.
As a corporate leader you have a choice to make, your
behavior in terms of your ethics and CG will determine
your true value