HARARE - Harare Mayor Muchadeyi Masunda, a director of numerous companies, says multiple directorships are a result of firms seeking services of the same people whom they feel are competent.

This comes as concern has been raised that multiple directorships compromise corporate governance while also pausing a risk of destroying skills diversity on companies’ boards.

The Institute of Directors of Zimbabwe (IoDZ) said authorities were currently crafting a National Code on Corporate Governance which specifically recommends that one should not occupy more than five directorships or chair more than one board of a public company.

But Masunda argues that the directorships are based on capability and competence.

“In many instances, the perennial whingers about alleged ‘corporate incest’ are unmitigated failures who can not even organise a piss up in a brewery,” he said.

“We do not foist ourselves onto the boards of directors of the companies concerned,” he said.

“We get invited to serve on boards of directors of a number of companies on the strength of the expertise, integrity, proven and impeccable track record of service as well as value for money which the shareholders of various companies get at all material times,” he added.

Masunda sits on the boards of Old Mutual, John Sisk & Son, Siemens and Atlas Copco.

He is also a director of Bindura Nickel Corporation, Meikles, HIB Holdings, Zimbabwe Alloys and is deputy chairperson of Zimbabwe Platinum Mines, among other companies.

Masunda is not the only one with multiple directorships.

According to Scanlen & Holderness website, Sternford Moyo — a renowned corporate lawyer — is co-chairperson of the Human Rights Institute of the International Bar Association, chairperson of Stanbic Bank Zimbabwe Limited, chairperson of Schweppes Zimbabwe Limited, chairperson of the Zimbabwe Revenue Authority and director of several other companies including a local media company and Portland Holdings Limited.

There are several others.

“The bottom line is simply that gluttons for punishment like me whose services are very much sought after by umpteen companies are renowned for not only being workaholics but also adding considerable value and gravitas to the corporate entities whose boards of directors we have privilege of serving,” Masunda said.

However, IoDZ chairperson Johannes Mudzengerere, has said companies tend to look for the very few well-known persons to seat on their boards.

“Having the same people on various boards will certainly limit the effectiveness of boards as you are bound to have restricted skills or expertise pool, increased conflict of interest and reduced independent judgment,” Mudzengere said.

Should one company close because of poor board judgment, he said, that is likely to have catastrophic consequences to a number of other organisations as the same people are likely to have given the same advice.

Mudzengerere said boards require diversity in experiences, skills, expertise, age, gender and nationalities because of globalisation so corporates should look for new skills to broaden their ability.

“If companies or boards look beyond the people who are generally known, they will discover a lot of talent and expertise that can contribute to the effective performance of boards.”

Tsitsi Mutasa, Zimbabwe Leadership Forum (ZimLef) managing consultant, has also said that multiple directorships are a problem not only in Zimbabwe, but the world over.

In Zimbabwe, she said, the trend points to inadequate or ineffective board recruitment processes and systems coupled with ineffective board performance evaluation practises.

“Factors underlying this trend are numerous but they all have their roots in weak corporate governance structures and processes and lack of director integrity which leads to individuals accepting numerous board appointments at the expense of the said organisations,” she said.

“Those who favour the notion cite talent availability but in reality the problem is not lack of talent.” - Eric Chiriga, Business & Online Editor