Corporate Governance Status
May 2005

Corporate Governance Developments in Zambia

Following the initial work of the Zambian National Task Force on Corporate Governance in 1999 and the establishment in April 2000 of the Institute of Directors of Zambia (IODZ), much if the subsequent work in corporate governance in Zambia has been assumed by the IODZ.

The IODZ whose membership has grown significantly in the last year to a membership base of 207, is committed to promoting the practice of sound and effective corporate governance principles in all companies and organisations. IoDZ continuously monitors development in the field of corporate governance as well as issuing best practice guidelines as appropriate. This entails encouraging compliance with guidelines such as the King II.

IoDZ's main line of activity is director training with the following terms of reference:

(a) To design and organise various training programmes targeted at improving the capacity, knowledge and boardroom performance of directors in private and public companies and other organisations;

(b) To organise professional conferences and seminars aimed at promoting the practice of sound corporate governance principles;

(c) To work in conjunction with appropriate Institutions of higher learning with a view to developing and running specialised courses in corporate governance; and

(d) To liaise with the IoD (UK), towards introducing a programme leading to the award and qualification as a "Chartered Director" in Zambia.

The International Relations Committee of the IoDZ was established to forge regular and fruitful contact with international organisations in the field of corporate governance.

 During the year, the Institute was successful in negotiating for a grant of K 24 million from the Private Sector Development Programme, which funded the:

(a) Publication of the IoD Brochure for director development; and
(b) Review of the corporate governance manual.

One of the objectives of the IoDZ is to sensitise Zambia's top 100 companies and organisations by holding workshops and seminars on corporate governance, directorship and board effectiveness. Consequently, IoDZ has already conducted workshops and seminars for a number of companies and organizations including Zambia Wildlife Authority, Roads Fund Agency, Roads Development Agency, Road Traffic And Safety Agency, National Airports Corporation Ltd., Programme Against Malnutrition, Zambian Breweries Plc, Energy Regulation Board, Barclays Bank Zambia Plc, National Council For Construction and the Copperbelt Environment Project etc.

The IoDZ also held a seminar for the insurance industry where executives were sensitised on governance issues.

The IoDZ has signed a memorandum of understanding with the Zambia Insurance Business College (ZIBCT) with a view to working towards the institution of a full time course in corporate governance at ZIBCT.

Meetings have been held with the Secretary and the Deputy Secretary to the Cabinet to sensitise them on activities of the IoDZ and plan for a workshop on corporate governance for permanent secretaries as the executive officers of government.

The IoDZ successfully launched its Copperbelt Branch on 17 April 2004. It is expected that the branch will go a long way in promoting corporate governance in the business community in the Copperbelt.

The following activities and workshops have been planned for 2005/2006 by the IoDZ:

(a) CACG accredited course "Training of Trainer's Course";

(b) Members of Parliament, Cabinet and Deputy Ministers' Seminar;

(c) Permanent Secretaries' Workshop;

(d) CACG Course I;

(e) CACG Course II;

(f) Mayors, Town Clerks and Municipal Treasurers' Course;

(g) The role of board committees; and

(h) Zambia Insurance Business College Trust (joint) courses on corporate governance.

A number of corporate governance issues have been included among the amendments to the Insurance and Pension Scheme Regulation Acts by the regulator of both the Pension and Insurance industry. These will soon be discussed in Cabinet before being taken to Parliament. It is envisaged that when this happens, a number of regulatory issues arising from the lack of governance provisions in the current legislation will be resolved.

The Lusaka Stock Exchange (LUSE) has issued a directive that all listed companies should have a code of corporate practices and conduct in place. The IoDZ is encouraging and assisting its members in formulating such codes for their respective organisations.

Source: Pan African Consultative Forum on Corporate Governance