Zimbabwe has enacted a new Act which limits the interference of Cabinet ministers on the running and supervision of state owned enterprises and parastatals which fall under their portfolios.
Government has begun overhauling state owned enterprises which have perennially haemorrhaged the fiscus.
Critics have blamed the poor performance of the entities to poor oversight by the state and cronyism. The Corporate Governance Act, which was launched in the capital yesterday, comes as Zimbabwe largely relied on a self-regulatory environment.
A National Code on Corporate Governance was in existence but not promulgated into law.
The new law also applies to Commissions established by the Constitution. Officiating at the launch retired High Court judge Justice Moses Chinhengo said the law is designed to provide a uniform mechanism for regulating the conditions of service of members of public entities and their senior employees and provide for matters connected with or incidental thereto.
In terms of the Act, a chief executive officer of a public entity is appointed by the board of the entity with the approval of the President. Line Ministers are not to be directly involved in the appointment.
Another provision, which also protects executives at state enterprises and parastatals, is that clear grounds for dismissal of board members and top executives are set which are measurable and relate to performance and or conduct.
“Section 16 deals with dismissal of board members. This section supercedes the provisions of any enabling instrument inconsistent with it. It provides board members of public entities with some security of tenure by proscribing their dismissal except for reasons stated therein,” said Justise Chinhengo in his presentation at the launch.
“Gone are the days when board members were dismissed or required to vacate their office on the whim of a Minister,” he added.