CBZ wins top award

BUSINESS REPORTER

CBZ Holdings won the listed companies Overall Best Corporate Governance Disclosures Award for the second year running at the 2021 Excellence in Corporate Governance Awards, held at the Rainbow Towers Hotel in Harare on Wednesday evening.

The first runner-up for the listed companies overall award was African Sun, while Delta Corporation came third.

CBZ Holdings subsidiary, CBZ Bank, won the banking institutions Overall Best Corporate Governance Disclosures Award ahead of FBC Bank and CABS.

First Mutual Holdings won the insurance companies Best Corporate Governance Disclosure Award, while TelOne took the top award for state-owned entities and parastatals.

The annual awards that acknowledge excellence in corporate governance are hosted every year by the Chartered Governance and Accountancy Institute in Zimbabwe, previously known as the Institute of Chartered Secretaries and Administrators in Zimbabwe.

There were other awards for different aspects of corporate governance among listed companies and banking institutions.

Among listed companies CBZ Holdings won the Best Shareholder Treatment Disclosures Award ahead of Bindura Nickel Corporation and Axia Corporation.

The Best Stakeholder Practices and Sustainability Reporting Disclosures Award went to Innscor Africa. African Sun and Padenga Holdings came second and third respectively.

The Best Board Practices Disclosures Award was won by African Sun. Seed Co took second place in this category, while Delta Corporation came third.

Public Service Commission (PSC) chairman Vincent Hungwe said this year’s theme, Good Corporate Governance for Sustainable Economic Development, resonated well with the economic and structural reforms being implemented towards the Vision 2030 goal of attaining upper middle income economy status.

He said the PSC has geared itself in pursuit of high performance, professionalism and ethics.

“We are in the final stages of operationalising our Public Service Academy for the purposes of deepening, sharpening and expanding the development of our human capital,” Hungwe said in a speech read of his behalf by an official from his office.

He said excellence in corporate governance meant an organisation’s processes were aimed at producing results which met the needs of society and organisational prosperity, while making use of available resources.

“The correct and consistent application of sound policies and principles, among other things, creates a healthy, compliant, transparent and accountable corporate culture that ensures that member behaviour aligns with the values your organisation seeks to embody.”

Among the shortcomings detailed by the adjudicators in respect of many listed companies was failure to disclose the essentials of their dividends policies, the mechanism that allows minority shareholders to influence board composition, directors’ and management’s shareholding and whether the chief executive’s or managing director’s performance had been evaluated annually and whether directors or management had undergone any training in corporate governance.

The adjudicators’ report also pointed out, in the light of Environmental, Social and Governance reporting requirements, the failure of companies to explicitly mention their obligations to various stakeholders and the outcome of all their dealings with various stakeholder groups.

With respect to banking institutions, the report said most of them, while highlighting directors’ qualifications, did not articulate their skills, experience or age and any other directorships held. There was a lack of gender balance in the composition of boards.

The majority did not disclose their remuneration policies. They only disclosed remuneration paid to directors as an aggregated figure and not individually separated as required by best practice.

Most of them disclosed related parties transactions but improvements were needed in disclosing the limits and terms of such transactions as well as the approving and monitoring procedures.

Only three of the reports that were evaluated paid significant attention to sustainability issues.

“Given the rise in the use of environment, social and governance criteria by investors and other stakeholders, institutions that lag behind in this respect expose themselves to risks that may irretrievably harm their businesses,” the report said.

With regard to insurance companies, the report said it was difficult to extract from annual reports whether ample notice of shareholders’ meetings was given and disclosure of members’ voting rights.

The annual reports did not disclose the number of directorships in other organisations that each board member had or the balance in terms of age of board members.

Only about three percent of state enterprises and parastatals (SEPs) produced full annual reports for 2020. In the few reports evaluated the independence of board members was not disclosed.

None of the SEPs evaluated provided information on where else directors were serving.