“Corporate Governance in Quoted Equities” The Securities Commission S e c of Zimbabwe

1. Introduction 2. New Global Landscape 3. Impediments To Success 4. SECZ Corporate Governance Objectives 5. SECZ Initiatives 6. Board of Directors 7. Chairperson, CEO & Shareholders 8. Conclusion

Local capital is now part of the global capital thus the following key demands: 1. Upholding corporate governance, in Zimbabwe, poor corporate governance has proved to be our major stumbling block. 2. Credible business strategies that can survive the competitive global environment and rides above sectoral risks (political, sovereign, regulatory). 3. Equator principles (managing environmental and social risks)

 With financial markets globalisation, liquidity has also become global.  CBZ bond on the Cayman Island Exchange.  Prada raising money in Hong Kong  Masawara in London’s AIM  Currently, foreign investors contribute about 40% of the buy side active players on the ZSE.  To access it good corporate governance credible and ethical structures a requisite.

 Weak Corporate Governance & lack of Integrity (honesty).  Need for Strong Institutions (ZSE, SEC, CSD, etc)  Need for National Code of Conduct  Need for Surveillance/ Monitoring & Enforcement (companies to follow guidelines).  Manipulation of markets (insider trading and related party activities).

1. Providing high level of investor protection. 2. Reducing systemic risk in capital markets. 3. Promoting market integrity and investor confidence. 4. Preventing market manipulation, fraud and financial crime. 5. Ensuring transparency, accountability, fairness in capital markets.

1. SECZ is a member of CISNA,working towards IOSCO membership. 2. To strengthen corporate governance and standards of self regulation in line with international standards. 3. SECZ, trying to inculcate ethical conduct in the capital markets through SI. 100 / 2010 the Securities (Registration, Licensing and Corporate Governance) Rules. The Fourth Schedule gives a guideline on corporate governance practices by licensed capital markets players.

I. Role & Responsibilities of the Board - To control, lead and guide the corporate body. II. Multiple directorships - No person should be chairperson of more than one public listed company. III. Balanced Board: constitution of an effective Board, diversity in terms ofskill, gender, age IV. Establish committees of Board. V. Appointment & Qualifications and Remuneration of Directors. VI. Supply & disclosure of information to Board. VII. There should be clear succession plan for chairperson & CEO

i. Clear separation of roles & responsibilities of chairperson & CEO. ii. No person may be chairperson of more than one public listed corporate body. iii. Approval of major decisions is made by shareholders. iv. Shareholders are to be given sufficient and timely information.

i. Equitable treatment of shareholders. ii. Sufficient Information to be disseminated to all shareholders, the same time. Information to be made public as soon as its known. iii. Right to participate & vote in company activities. Investor Activism. Poor role modelling by institutional investors. iv. General meetings: i. There has to be sufficient information on voting rules & procedures to shareholders ii. Shareholders must be given time to question management and to consider costs & benefits of their votes

1) Accountability & Audit  Board must establish an audit committee  Annual report and Accounts (Intergrated Reporting, Sustainability Tripple Ps).  Internal control and Independent auditors  Relationship with auditors 2) Role of Audit Committees  Attributes of audit committee members  Duties of audit committees  Audit committees & internal audit functions  Participation in meetings of audit committees

 Advisor to be independent.  Save in exceptional circumstances advisor not to advise on both legal &financial matters.  Advisor should not advise on any transaction which he or she is a party

 The financial operating environment has changed.  Those who influence and adapt to change are more likely to survive than those who resist.  Our collective effort in upholding good corporate governance and ethical standards will definitely yield positive results for us and the economy at large.

Thank you!