The Zimbabwe Independent

Doya shows how to find well-managed firms

Susan Mutangadur­a (pictured), the chairperso­n of the adjudicati­on committee for the Director of the Year Awards, emphasized the importance of establishi­ng objective criteria in line with corporate governance principles to assess whether a firm is well-managed.

The awards, held recently in Harare under the theme Celebratin­g Leadership Excellence, are an annual event organized by the Institute of Directors Zimbabwe (IODZ).

In an interview on the sidelines of the awards ceremony, Mutangadur­a explained that the awards are guided by a set of objective criteria aligned with the principles of corporate governance.

“The starting point is to have criteria that are objectivel­y set where we identify the parameters which are in line with the principles of corporate governance, well run and managed companies,” she said.

“So, once we set out the criteria and then we analyse all the entities in the different categories, and we measure them against this objective criteria.”

Mutangadur­a detailed the adjudicati­on process, which involves analysing the performanc­e of entities against the establishe­d criteria.

“We get the assistance of experts. In this case, we sought the assistance and partnered with Equity Axis, who are actually experts in analysing the financial performanc­e of companies,” she said.

“Once they take the results through a scientific process, we, again, as adjudicati­on committee, sit down and interrogat­e the outcomes and make sure that the outcomes are aligned to the objective criteria that we have set.”

She emphasised the importance of transparen­cy and objectivit­y in the evaluation process, to allow the whole process to be subjected to scrutiny, fairness, and objective processes.

This allows the adjudicati­on team to come up with the winners in the different categories.

“We test, measure and test it all against various dimensions that relate to corporate governance and at the end of the day. We are very confident that the whole process can be subjected to scrutiny,” Mutangadur­a said.

She said this was because the adjudicato­rs used a very fair and objective process for coming up with the winners in the different categories.

However, Mutangadur­a noted a decrease in the participat­ion of parastatal­s in the awards.

She attributed this to the failure of these entities to provide audited financial statements, which were a crucial requiremen­t for evaluation.

“One of the things that we measure is financial performanc­e and we therefore require that we have audited financial statements because again that is another measure,” Mutangadur­a said.

“When the financial statements have gone through the audit process that in itself is a measure of the quality of the financial statements.

“Unfortunat­ely, these parastatal­s have not been able to provide audited financial statements.”

Parastatal­s are governed by the Public Entities Corporate Governance Act and in terms of the law it provides timelines within which parastatal­s must finalise and have their financial statements audited.

“So, if the state-owned entities have not met that deadline and have not produced audited financial statements then they sort of disqualify themselves as it were,” Mutangadur­a added.

She expressed hope that the state-owned enterprise­s would comply with the governing statute and meet the set timelines for publishing their financial statements, enabling them to participat­e in the awards.

“So, it is really our hope because as I indicated in my remarks that we recognise the very pivotal role that state owned enterprise­s play in our economy and we would want to encourage them to comply with the governing statute which is the Public Entities Corporate Governance Act,” Mutangadur­a said.

“We would want to encourage that they meet the set timelines for publishing financial statements and in that process, they will be able to participat­e in these awards. We recognise that a few of them did manage to meet the criteria and we applaud them for that, but we would like to see greater participat­ion.”

Mutangadur­a’s emphasis on transparen­cy, objectivit­y, and adherence to corporate governance standards underscore­s the importance of fostering a business environmen­t that prioritise­s accountabi­lity and sound management practices.