Home » Governance » ’Board Members Should Be Held Accountable’

Boards of parastatals and State-linked entities should be held accountable for the financial losses Government suffered when they approved mega-salaries for executives at institutions they were mandated to steer.

In an interview, Deputy Home Affairs Minister Ziyambi Ziyambi told The Herald that the grossly overpaid executives could not be prosecuted because they signed legally-binding contracts approved by their boards.

As such, he said, the buck stopped with the board members.

Deputy Minister Ziyambi said shareholders could either fire the boards and executives, or request them to compensate for the losses.

“They (executives) have contracts so if the boards approved the salaries it does not translate into a criminal offence, its purely a labour issue.

“The boards can be liable to stakeholders or shareholders or owners of the companies to show cause why they breached their fiduciary duty to hold the company’s good faith and do things that do not jeopardise stakeholders interests . . . because if somebody gives someone a salary to do a job, which is not commensurate with what is coming out, that person is liable,” he said.

Deputy Minister Ziyambi, however, said public sector bosses implicated in “salarygate” were difficult to prosecute because the resultant contractual disputes were purely civil matters.

This follows a public outcry that authorities were dragging their feet in prosecuting those implicated in the scandal.

Legislators have also complained that police had not made any arrests.

But the police have pointed out that they cannot make any arrests in the absence of formal complaints to them.

Government has provisionally capped public sector remuneration at US$6 000 – inclusive of allowances – while Cabinet comes up with a comprehensive payment structure for all State-linked entities.

About 3 000 senior executives and board members of 78 State-linked firms cost Government US$600 million in salaries and allowances since 2009, and US$133 million last year alone.

Information, Media and Broadcasting Services Minister Professor Jonathan Moyo has said Government is turning the recently adopted policy framework on parastatals and State entities into an Act of Parliament to legally punish officials who deviate from good corporate governance.

The Corporate Governance and Remuneration Policy framework was established to monitor operations of parastatals and local authorities, as well as curb corruption and awarding of unrealistic packages in the public sector.

Source : The Herald