Public sector corporate governance in Zimbabwe: the nexus between the ZIMCODE and state-owned enterprises

Abstract

The nexus of political and legal dynamics in Zimbabwe’s public sector generates a strain on the corporate governance that emerges in that environment, thereby making the application of the ZIMCODE in state-owned enterprises (SOEs) implausible. This perspective paper is a riposte to a writing by Chavunduka and Sikwila (2015) titled “Corporate Governance in Zimbabwe: The ZIMCODE and State Owned Enterprises Connection”, where the authors sought to examine the implementation of the national corporate governance code by state-owned enterprises and develop a nested model to be used by SOEs in implementing the code. The writer contends that the ZIMCODE is not the right apparatus to produce responsible behaviour in Zimbabwe’s SOEs. A qualitative approach is used. Document analysis is employed to gain insights into the corporate governance trends and challenges in Zimbabwe’s state enterprises. The main sources used were government reports, conference papers, published research, and newspaper articles. The paper brings to attention factors such as cronyism, corruption, and political interference, which make ZIMCODE incompatible with governance in Zimbabwe’s SOEs. It concludes that the principles-based soft law approach to corporate governance is incompatible with Zimbabwe’s public sector landscape and argues for a rules-based legislative solution that will impose stringent regulatory oversight.