HARARE – The Institute of Chartered Secretaries and Administrators in Zimbabwe (ICSAZ) has launched Excellence in Corporate Governance Awards to recognise corporate governance practitioners and organisations that exemplify excellence in corporate governance in the country.
Speaking at the official launch of the awards recently at a Harare hotel, ICSAZ Chief Executive and Secretary Farai Musamba said the awards, which are expected to be presented for the first time on November 14, will be an annual event.
“In our view, corporate governance serves to determine what society considers to be the acceptable standards of corporate behaviour and to ensure that companies comply with those standards and are held to account for their corporate actions.
“Thus the importance of governance professionals in any economy, big or small, cannot be over-emphasised,” he said.
“For emerging market countries like Zimbabwe, improving corporate governance can serve a number of important public policy objectives.
“Good corporate governance reduces emerging market vulnerability to financial crises, reduces transaction costs, reduces the cost of capital and leads to capital market development,” he said.
Mr Musamba added that weak corporate governance frameworks reduce investor confidence and can discourage both local and foreign direct investment.
“Over the past several years the importance of corporate governance has been highlighted by the various corporate misdemeanours which have negatively affected many members of society and a myriad of economic stakeholders.
“Having considered the challenges our economy is facing, the institute decided to promote corporate governance through the Excellence in Corporate Governance Awards,” he said.
Mr Musamba explained that the awards aim to enhance good corporate governance by recognising the leadership efforts of corporate boards in practising good corporate governance principles in the way they function.
He added that the awards will also recognise implementation of ethical and innovative practices, programmes and projects that promote good corporate governance and encourage corporates to focus on excellence in corporate governance practices to enhance value creation.
“It is our hope that the recipients of these awards will be seen to exemplify excellence in corporate governance as expounded by various codes presently recognised for benchmarking good corporate governance in Zimbabwe.
“The expectation of the institute is that the awards will become a reference point in the market, much to the benefit of investors,” he said.
Mr Musamba explained that the inaugural awards will focus on companies listed on the Zimbabwe Stock Exchange which published annual reports for the 2012 financial year and are still trading on the bourse.
However, he said, it was expected that in future, categories of the awards will be expanded to cater for state owned enterprises, small to medium-sized enterprises and other organisations.
He said for organisational awards, the categories available are Best Shareholder Treatment Award, Best Stakeholder Practices and Sustainability Reporting Award, Best Board Practices Award and Overall Best-Governed Company Award.
For individuals, he said, there is the Governance Professional of the Year Award, which is open to board members, company secretaries or legal counsels, risk managers, financial controllers and compliance officers or managers.
Mr Musamba went on to say the institute had set up an organising panel which developed scorecards to address the various corporate governance issues of interest to the public. These scorecards, he said, formed the basis of the adjudication process.
“We believe that the templates or scorecards will enable the adjudicators to make an objective assessment of the corporate governance practices in the various companies in order to enable these to be ranked,” he said.
Mr Musamba pointed out that the institute is aware that, since this year’s awards will be the first such awards, the first event may face teething challenges.
“We believe we have the capacity to make these awards the best they can be and if there are any areas of concern that we come across, we will obviously address them to retain the objectivity of the awards,” he said.
Speaking at the same occasion, ICSAZ president Glovah Madzima said the institute had selected a team of six adjudicators who were chosen because of their expertise in various aspects of corporate governance and analytical skills.
“The adjudicators are using the ICSAZ Corporate Governance Scorecard to rate companies on their corporate governance practices utilising publicly available information, the main source of information being companies’ annual reports,” he said.
“However, any other information issued by companies to shareholders will be used. The institute has also received the support of the Securities Commission of Zimbabwe and the Zimbabwe Stock Exchange to access this information, which is predominantly in the public domain,” he added.
Securities Commission of Zimbabwe chief executive Tafadzwa Chinamo and Zimbabwe Stock Exchange chief executive Alban Chirume, who were among the invited guests at the launch, both expressed their appreciation of the awards.
Mr Chinamo warned that there was a trend with award ceremonies that the companies which sponsored the awards and put up the most banners at the awards presentation ceremony usually ended up being the winners.
He said he hoped the Excellence in Corporate Governance Awards would not be the same and would reward deserving companies and individuals transparently.
Mr Chirume echoed the same sentiments. He added that the listing requirements for the Zimbabwe Stock Exchange, which were last reviewed in 2002, had been revised. It was expected that the new requirements would be available next month.
He said that it was envisaged that the Zimbabwe Stock Exchange would have a second tier that would encompass more companies, including small to medium-sized enterprises.