HARARE - Poor corporate governance within Zimbabwean companies has contributed to the country’s poor ranking in global corruption indices, Deposit Protection Board (DPB) chief executive John Chikura said.

Chikura said the hapless corporate governance structures were responsible for the collapse of many Zimbabwean companies, leading to the nose dive in international indices.

“Lack of business ethics and good corporate governance has led to the low rankings, giving rise to corruption, corporate scandals, and poverty. This affects the efficiency of productivity in the economy and the allocation of resources.”

“Transparency International, for instance, recently ranked Zimbabwe No. 134 out of 186 countries on its corruption perception index,” Chikura said.

He defined corporate governance as the system by which companies are directed and controlled, adding that it involved regulatory and market mechanisms, roles and relationships between a company’s management, its board, its shareholders and other stakeholders and the goals for which the corporation is governed.

The DPB boss said the poor corporate governance within companies has risen from owner-managers who are running most local companies in the country, resulting in compromised transparency, especially at board level.

According to Transparency International, a global coalition against corruption, Zimbabwe was last year ranked number 154 out of 182.

In 2010 the country was ranked number 134 out of 186 countries on the corruption perception index.

“Corruption is basically an aberration, it is dishonesty and it harms the interests of shareholders, society and all stakeholders,” said Chikura.

“Avoid being greedy. It is a major driving source of corruption. You can only live in one house at any given time. You can only drive one car at any given time. Profits to companies are like food to people, how many consider eating to be the central or only purpose in life. Maintain the highest ethics, integrity and probity.”

“These are paramount to your future success both among fellow professionals and society at large,” Chikura said.

Despite fingering poor corporate governance mechanisms as the key driver of corruption in Zimbabwe, Chikura interestingly fell victim to corporate governance laws when he was removed from the SEC board last year because he held a board seat at Afre.