Executives to declare earnings
Farirai Machivenyika Senior Reporter
The National Code of Conduct recently drafted by Government and the private sector and set to be launched by President Mugabe calls for companies to have disclosure policies that provide information on salaries and other benefits paid to directors and senior management.
According to the code, a copy of which The Herald has, information disclosure is critical in building confidence, accountability and trustworthiness among stakeholders.
The first-of-its-kind in Zimbabwe, the code provides measures to stop the payment of outrageous salaries and benefits paid to public sector bosses at the expense of service delivery.
The code also binds the private sector to good corporate governance principles.
It reads in part: “Disclosures should also include information on the company’s remuneration policy and directors’ remuneration including salary, benefits, bonuses, stock options and pensions, details of fixed component and performance linked incentives along with the performance criteria, fees and any other reimbursement or emoluments payable to independent non-executive directors.
“Disclosure should also include information on the identities of persons who control the company or who have a significant ownership of the company or who through indirect shareholding such as trusts or other legal devices are linked materially to such persons.”
Since the beginning of the year, the media have exposed mega remuneration earned by top executives at parastatals and local authorities despite the fact that most of them were failing to deliver services as expected.
The financial services sector was also hit by scandals which saw individuals who owned and/or ran the institutions abusing depositors’ funds for their personal benefit, resulting in most of them closing shop.
The National Code on Corporate Governance in Zimbabwe also proposes that companies have a whistle-blower system that protects people who divulge any information on corrupt activities.
“A whistle-blowing system that is independent, trusted and anonymous is key to the effective implementation of an ethical corporate culture and fraud risk management strategy. A whistle-blower provides evidence of a waste of funds or mismanagement,” the code reads.
In a letter to all Cabinet ministers and heads of ministries, Chief Secretary to the President and Cabinet Dr Misheck Sibanda said the code would complement Government efforts to bring sanity to the public sector and local authorities.
The code would also complement various provisions in the new Constitution that were enacted to deal with the scourge of corruption.
Government has in the interim put a salary cap of US$6 000 for the highest-paid public sector executive while a comprehensive remuneration structure is established.
The National Code on Corporate Governance applies to all business entities, but acknowledges that certain entities require a sector-based approach.
Special sectors such as financial services and SMEs should have their specific codes that will be read together with the national code.