Professional Ethics Under The Constitution Of Zimbabwe

Introduction

In November 2010, the Ministry of State Enterprises and Parastatals released the Corporate Governance Framework For State Enterprises And Parastatals In Zimbabwe. The document was an attempt by the government to restore sanity in State Enterprises and Parastatals (SEPs) through promotion of the efficient use of public resources and accountability for the stewardship of those resources to enable them to break even since they were operating at a loss despite the fact that they were largely funded by tax payer’s hard earned money. The Government had adopted a conscious thrust of public enterprises reforms focusing on reducing dependence on the fiscus and enhancing their contribution to economic turnaround. As a result, the Government sought to ensure that the SEPs have sound governance systems. The sound Corporate Governance systems will ensure improved service delivery to the tax payers. The Government also wanted to minimize risks associated with Corporate crime, which was essentially a cancer all of the world which thrived in countries with weak Corporate Governance. According to the Framework, the governance systems in some of these SEPs is currently characterised by role ambiguity, ineffective boards, ineffective management systems and non- adherence to statutes. This scenario has contributed to the poor performance of some of these SEPs, rendering them, as alluded to above, a major drain to the fiscus.

Of notable concern is the fact that the Framework itself defined the ‘Accounting Authority’ as the ‘SEPs board or other controlling body of the SEP or where there is no such Board, this shall refer to the CEO or other person in charge of that SEP unless specific legislation applicable to the SEP designates another person as the Accounting Authority as provided for in the Public Finance Management Act’. This inadvertently places a lot of power in the hands of the CEO and other top ranking Executives in the SEP. The amount of power placed in the hands of the executives creates the Agency problem as they become self-serving and pursue their own interests ahead of those of the shareholders. They “forget” that they actually work for the shareholders who are rightly te owners of the firm. It is important to note that the issue of powerful CEOs is not unique to Zimbabwe or African countries as a Report in Fortune Magazine of April 28th in 2003 carried an article where CEOs, past and present, of Tyco were taking home compensation of up to USD$136 million despite their companies performance in what was termed ‘wholesale looting for the company’ by the journalist. Interestingly though, the same company went on to produce two top earners in 2002. While the uproar due to the Tyco looting may have yielded some results, there is now concern over stealth wealth here directors and CEOs are now given stealth wealth which is essentially differed compensation in the form of hefty allowances and stock options, shares as well as bonuses however apparently through no fault of theirs, but largely due to the nature of the contracts that they would have signed.

Closer to home, Zimbabwe has not been spared after suffering its fair share of Corporate scandals. A report by Dr Silas Luthingo Rusvingo entitled The Salary-gate Scandal in the Zimbabwe Parastatals Sector: Another Darkside of the Nation compiled in the period from 2013 to 2014, attempted to expose the extent of the rot in the SEPs. According to Mtomba, 2014, Zimbabwe has a total of 78 parastatals and all of them are saddled with rampant corruption with main focus being placed on the Zimbabwe Electricity Supply Authority (ZESA), Air Zimbabwe, Harare City Council (HCC), The Public Service Medical Aid Society (PSMAS) and the Zimbabwe Broadcasting Corporation (ZBC). It came to public knowledge that Zimbabwe Broadcasting Corporation (ZBC) Chief Executive Officer, Happison Muchechetere grossed a staggering US$ 40 000. 00 and got about US$ 250 000. 00 as a housing allowance and US$3000. 00 as entertainment allowance while many employees at the public broadcaster had gone for months without pay. On further pressing, the then Permanent Secretary responsible for Media, Information And Broadcasting Services, George Charamba, made a staggering public admission that while ordinary employees continued to go unpaid at the public broadcaster, the information pertaining to the ZBC CEO’s salary was suppressed ahead of harmonized elections in July 2013. In 2014, Premier Services Medical Aid Society (PSMAS) Chief Executive and Board Chairman Mr Cuthbert Dube, was fired following a public outcry over his obscene US$ 210 000 monthly salary. This development came amid reports that the PSMAS top management was gobbling at least US$ 1. 3 million in monthly salaries and allowances. According to Chirara (2014) of Daily News, the hefty salary pocketed by the CEO, was despite PSMAS owing various service providers up to US$ 38 million as at 31 December 2013 and that despite the rocking noises made about Dube’s obscene salary of US$ 230 000 per month he had in fact only been retired and not deservedly fired for criminal abuse of office. According to Chirara (2014) retired PSMAS Chief Executive Cuthbert Dube walked away with a tantalizing ‘golden’ handshake of US$ 20million from a debt ridden organization funded by lowly paid civil servants whose salaries were hardly US$ 300. 00 per month which was still way below the poverty datum line of a family of six amounting to US$550 per month.

A surprise announcement is made that Cuthbert Dube was off the hook for his mega salary scandal. While the Harare City Council is not a SEP but is actually a local authority, it is imperative that it be made mention of here as it was not spared by the cancer of the mega salaries. It was quite in order that the Harare mayor Bernard Manyenyeni had taken the unprecedented move to suspend Tendai Mahachi, the Harare Town Clerk to pave way for unhindered investigations into his shenanigans at Town House which the Town Clerk stood accused of ranging from unsatisfactory discharge of his duties as well the key he played in the payment of mega salaries to a bloated management of 18 managers who were reportedly earning a whopping US$ 500 000 in perks and allowances. While the role of Government as watchdog, referee and umpire could not be overemphasised, it came as quite a shocker when the then Minister of Local Government and National Housing, Honourable Ignatius Chombo, reinstated him in a show of power against the Harare, Mayor Bernard Manyenyeni. Administratively, the move by Manyenyeni was above board and little did he know he had shaken a hornet’s nest as he was summarily silenced as the Minister. On the role government, it was rumoured at the time that the Local Government Minister Honourable and Harare Town Clerk were like Siamese twins which means that an attack on Honourable Chombo was an attack on Tendai Mahachi and vice versa.

Conclusion

While it may seem surprising, there has been a generally accepted myth that CEOs are in short supply and only top head hunters knew the best CEOs. Furthermore, many members of boards believe that a great CEO is the key ingredient to corporate success. It is absolutely imperative that CEOs appreciate that the purported shortage of CEOs is a myth. Due to the number of CEO material that Business Schools are churning out, there is actually an increase in the supply of CEOs and in theory salaries and perks should be decreasing. The constitution of Zimbabwe in (Section 194) says a high standard of professional ethics must be promoted and maintained and efficient and economic use of resources must be promoted. Could it have been prudent use of financial resources, to pay a top official ‘entertainment allowance of US$ 3 000. 00 while several demoralized employees of the same public institution went unpaid for several months? Was this not self-serving? The constitutional clause could also be of relevance to the Executive in terms of the funds gobbled in foreign trips, big contingencies of government ministers in terms of economic use of resources. Were all these luxuries justified? The argument in the public domain is that the parastatal’s sector in Zimbabwe is the feeding trough of most cabinet ministers. The respective cabinet ministers should, by right, take the dishonest CEOs to task for Criminal abuse of office. For a cabinet minister to be in charge of a ministry he must be held to account for everything that takes place in that ministry. At the same time, boards needed to grow spines and desist from bending to the will of senior executives who were actually their employees.