ACGN urged to accelerate creation of common code of corporate governance for African firms
Founding member and past president of the Institute of Directors of Zambia (IoDZ), Dr Patrick Chasinga, has called on the Africa Corporate Governance Network (ACGN) to accelerate the creation of a common guide of corporate governance for companies across the continent.
According to Dr Chasinga, this is necessary for the ACGN to expand its frontiers across the continent.
“ACGN needs to accelerate the pace towards the development of a common guide of corporate governance principles and practices across Africa, so it can expand its frontiers to all companies across Africa,” he stated.
Dr Chasing made the above statement during the virtual maiden edition of the IoD Chairs Forum themed Development, Growth and Practice of Corporate Governance in Zambia and under the auspices of the ACGN.
The African Corporate Governance Network (ACGN) is a collaborative network of director membership organisations that promote effective corporate governance on the African continent.
It has 19 members and 9 affiliate members from 19 African countries representing over 20,500 senior executives and directors across the continent.
Giving a brief history of corporate governance development in Zambia, particularly with regards to the operations of State-Owned Enterprises (SOEs), Dr Chasinga remarked that prior to the corporate governance reforms that saw Zambian SOEs become profitable, some challenges in the governance of SOEs included;
• Poor performance monitoring
• Unsatisfactory return on investment
• Unprofitable SOEs which drained the national budget
• Lack of sound corporate governance practices by SOEs.
The reforms in corporate governance practices in Zambia lead by the IoDZ however, resulted in the following;
• Development of a code of corporate governance
• Civil servants where no longer appointed to chair boards of SOEs
• Board members of SOEs drawn from the private sector
• Enhanced transparency in board appointments
“Reforms in corporate governance led to SOEs becoming profitable and declare dividends, also corporate governance compliance has become mandatory,” he stated.
“Much has been done to raise the bar on corporate governance in the last 20 years in Zambia, but more needs to be done. For instance, Cabinet members still have the free hand to dissolve SOE boards subjectively and at will and this has to change,” he added.