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Prof Jonathan Moyo's briefing to ZBC Board

30 May 2014 at 07:21hrs | Views

The Board Chairman,
Board Members,
Deputy Minister Mandiwanzira,
Permanent Secretary Charamba,
Principal Director Chikowore,
Acting Chief Executive Officer,
Members of Staff present.

As this is our first ever meeting, I want to begin by congratulating you on your appointment to the Zimbabwe Broadcasting Corporation (ZBC) Board. Given the state ZBC was at the time of your appointment, it is no overstatement to say yours was an onerous and burdensome appointment. But there is also another way of looking at it: It takes real men and women of substance and stamina to resolve a dire situation. I want to believe that is what informed your appointments. In constituting you, we made sure you had a full survival kit by way of skills mix so you are able to competently tackle the assignment before you.

We are prepared to consider whatever other extra skills "hands" you may think necessary.

In underlining the importance of your appointments, I have indirectly underlined the importance of ZBC in the national scheme of things. Not only is ZBC visible; it is crucial.

ZBC is what any visitor to our country hears and sees upon arrival. Through it, the national mind is heard and seen, is laid bare. Through it, the state we are in is made apparent. From it, one should be able to read national pursuits and preoccupations, should be able to read the national effort, indeed the national purpose.

Through it, our ideas, aspirations, values and disappointments are vocalised and made visual. So the screen should project our united Nation the way it is and the way it aspires to be. This is how ZBC is judged and shall be judged.

As with many other institutions and enterprises of Government, ZBC has been unwell, plagued by countless corporate malfeasances. In the case of ZBC, we were confronted by a case of complete corporate failure whose most evident manifestation was the corporation's spectacular inability to meet its wage bill.

Workers went without incomes for more than seven months, forcing Government to intervene towards the end of last year. To this day, ZBC remains fragile, something which must exercise your collective mind as the new Board.

I intimated that the problems afflicting ZBC have proved typical of problems afflicting the public sector economy. This very serious matter has exercised the new Zanu-PF Government from its formation last year. Lots of ground has already been covered in resolving this adverse situation which has far-reaching implications to our economy in general and to the success of Zim-Asset programme in particular. If you bear in mind that State Enterprises and Parastatals account for nearly 40 percent of the Gross Domestic Product and, what is more, are located at strategic nodes of our economy, then you realise the full implication of a dysfunctional public enterprise sector.

The Cabinet Committee on State Enterprises and Parastatals Development, which is underpinned by a working party of Permanent Secretaries, has been very active on the matter.

I want to give you a glimpse into situations we have come across in our probe and review of these entities. We have come across situations of complete or near-complete collapse of corporate governance, manifesting as a complete breakdown in the shareholder-board-management relationship. Government comes across as an unenlightened shareholder who hardly demands sound management of, and good return on, its investments. Shareholder oversight has been erratic, unstructured or even non-existent, creating a culture of impunity within which corruption was bound to thrive. No Annual General Meetings were being convened, or where this was happening, these were being convened as a matter of routine with no meaningful business transacting at all. No dividend was being demanded and where this was not forthcoming, no questions were being asked, and no consequences visited those Government had appointed and entrusted with running the affairs of its interests.

Clearly Government needs to develop core competencies in dealing with the economic side of its mission. After all, the endgame of politics is not politics; the endgame of politics should be enhanced welfare of the citizenry through enlightened programmes on wealth-creation and wealth-distribution.

Generally, Boards of State Enterprises and Parastatals had turned themselves into a runaway, non-accountable layer in the corporate governance structure. Quite often, the Boards were incompetent, dormant, indifferent or dishonest, and fractious to a point where their chairpersons had either been overrun by their more stronger-willed Board peers, or had themselves overran their Boards into submission.

A third scenario arose where elements of management would overrun Boards to become a law unto themselves. All these situations corrupted Boards, creating room for arbitrary if not illegal decisions.

Against the background of weak shareholder interest and oversight, and divided and dishonest boards, management took full advantage.

We have come across situations where CEOs of State Enterprises and Parastatals dangled frills on officials in designated oversight roles, or simply divided, bribed and enervated their Boards in order to assume untrammeled power, in order go it alone.

In an environment where Boards were that severely weakened, CEOs became authors of their own contracts, outlining their conditions of services. This degree of unchecked power and unrivaled impunity showed in very brazen ways. Conditions of service for CEOs and their management became self-defined, self-negotiated, self-approved and ultimately self-awarded. They had become risk-free, managing sole proprietors! Or where there was some gesture to principles of corporate governance, pliant resolutions were extorted from Boards that hardly met, from Boards that hardly wielded minds of their own. Or simply getting a mortgaged Board Chairman to authorise such stratospheric conditions. Mortgaged because the wily management would have long ensnared and compromised him or her to a point where he or she began to identify with management, and not with his peers on the Board, let alone with the Shareholder whose value he had been appointed to protect, preserve and grow. I could tell you with very little risk of contradiction that more than three quarters of contracts currently wielded by CEOs of our parastatals and state enterprises can be challenged at law.

Much worse, conditions of service spelt out by those contracts are outrageous in themselves, to the extent of becoming conditions of disservice! Many, if not all, of our CEOs are on contracts which their enterprises cannot afford! And the key question to ask is how a Board condones a contract which is way beyond the enterprise's capacity to pay? Who meets the difference? Today we have situations where the only upward graph in our enterprises relates to the wage bill, a situation where the wage bill soars beyond the healthy 30 percent mark to levels which in many cases are above 70 percent in relation to total expenditure. In that strange equation, the CEO's salary dominates and this because of yet another strange if not devious twist of events.

Generally, collective bargaining has to be conducted within the earnings situation of an enterprise. In respect of non-managerial levels in any enterprise, management negotiates with the workforce as organised, in order to make recommendations to the Board. Not so in the public economy. Management had developed an interest in awarding hefty increments to workers, not out of a socialist love of the proletariat, but simply to then transfer the same percentage rise to themselves as if they are part of shop-floor staff! So a 9 percent wage increment to the general workforce would justify and translate into a 9 percent salary increment to management! Knowing that the enterprise was sinking and that the coffers were near-empty, management would pay themselves first, leaving workers holding on to a fictitious 9 percent increment! Or where wages could not be paid altogether, as happened at ZBC, managers would still borrow enormous amounts three or so months into the future, against an unpaid workforce.

The other anomaly related to the very structure of emoluments. Whereas the basic rule is that benefits drawn should always amount to 40 percent of basic salary, we had in our enterprises the exact opposite. Basic salaries were kept delusively low to evade taxes. Benefits far in excess of 60 percent would then be claimed both to evade and avoid taxes and also to mislead overseeing officials. It is not unusual to find a CEO whose basic salary is under US$10 000,00, taking home well over US$100 000,00 through a battery of monetised, open-ended benefits. Even CEOs with no school-going children still claim educational benefits for school-going children! I could go on and on in outlining these malfeasances, but the key thing is to restore sanity into the public economy which went unchecked under the Inclusive Government.

As a Board you are the legendary Phoenix emerging from the ashes of generalised corporate mis-governance in the public sector. You dare not return to ashes. You must mark a new path in corporate governance, indeed become touchstones in public economy corporate governance. Cabinet now requires that Boards be properly appointed, be properly tasked and be properly supervised. You will no longer be left to your own whims and devices. Never again! The public economy must regain integrity and efficiency so it is able to underpin Zim-Asset and the whole economy. You may be the first Board to be shaped by this new dispensation of key results focus, of performance management. As the face of the Shareholder who is Government, I have come to formally spell out your assignment for the duration of your tenure, in line with this new Government thinking on the management of State Enterprises and Parastatals.

The Shareholder expects the following tasks to be accomplished within your term as a Board:

1.Restoring Rules of Proper Organisation and Corporate Governance at ZBC.

One factor which may have contributed to the complete collapse of ZBC is the absence of rules governing and guiding corporate practices. ZBC needs to have a clear handbook on rules that guide the interface and operations of its structures and its personnel, rules deriving from, and consistent with ZBC's founding statute and parameters of general corporate governance. The place and role of the Board must be spelt out; similarly the place and the role of management must be defined. One also hopes that the place, role and protocol governing the rest of the workforce also developed. How the three levels relate to one another must be dealt with to avoid the problems of the past. Above all, the interface between these three levels and the representative of the Shareholder, that is, the parent ministry, must be spelt out.

Dear Board Members, I am referring to a ZBC handbook on corporate practices, one that spells our procedures, standards and protocols governing your relations, conduct and operations here. Nothing must be left to conjecture.

2.Redefining the Vision and Core Mission of ZBC within its times.

While the generic mandate of ZBC, namely to educate, inform and entertain, are well known and recited, this is no longer obvious or adequate in this new environment of global multimedia. ZBC can no longer behave like it is a monopoly broadcaster both at law and in practice. Or behave like our broadcast space is hermetically sealed from encroachment from similar outfits operating from beyond our borders. Or to even imagine that the broadcast medium remains single and apart. By way of law, technology, current practices and audiences, ZBC's monopoly was long repudiated, even though ZBC lives and behaves like nothing has changed.

Audiences have changed and today enjoy choices going beyond what obtains within our borders. The Shareholder expects your Board to grapple with the whole question of Vision and Mission of ZBC in the current era of plural and borderless broadcasting, the era of volatile, ever converging technologies and restless audiences whose loyalties have to be followed, won and retained.

3.Restructuring ZBC mindful of past pitfalls and in tune with Vision and Mission.

ZBC is a creature of history and times. We have all seen the limitations of bureaucratic structures which have underpinned ZBC from birth. Its market has grown more nimble, independent and more volatile than ever before. Its structures have proved cumbersome, inadequate and averse to innovation. Much worse, its structures are out of step with how broadcast work gets structured and organised, and how inputs are turned into outputs under new technologies. And in situations where the law intervenes to hive off some functions from ZBC (listeners' licenses), structures will have to be revisited. Above all, the new structures require new skills, new personnel, while making old skills, old personnel, either redundant or in need of serious upgrades. ZBC's manpower strength will now have to be matched with its manpower needs under a new technological environment. The Shareholder expects this sensitive process to be handled by this Board, and handled in a way that minimises industrial conflict and related disruptions.
Fortunately the forensic audit and strategic turnaround study underway, which this Board must digest and implement once ready, should greatly assist the Board. At the end of the day, ZBC should emerge as an innovator who is also an employer of choice and integrity.

4.Gearing ZBC for competency in modern, sustainable public commercial broadcasting.

ZBC faces the risk of general technological obsolescence and, after June 2015, of being globally blacklisted for non-compliance with ITU-set world broadcast standards. It has to digitalise its operations as a matter of urgency and, without fail to have digitalised by June 2015. This is a time-sensitive key result area for your Board. It has something to do with major capital investments and development. This task includes finding resources for digitalisation project, managing the migration process from analogue to full digitalisation, and of course ensuring that ZBC is turned into a leading, commercially viable public broadcaster which recovers audience trust.

The Shareholder will have some role to play, but the responsibility remains that of your Board. And of course once ZBC is fully digitalised, that digital dividend must come back to it by way of better business, more loyal markets. For that to happen, ZBC must repair its relations with various players in the market, including advertisers, content providers, content creators and other service providers. ZBC must be a clean player, a trusted broadcaster who deserves to be partnered in business. Under your watch and leadership, solvency must return to the Corporation which minimally must be able to pay its bills, maximally must be able to reward the Shareholder for its investments.

5.Getting ZBC to fulfil its national and statutory obligations, including to the arts and visual industries.

As a national public broadcaster, ZBC must be seen to be operating within the law fully guided by our new Constitution. It must respect and promote content goals envisioned in its legislation. It must help build a content industry for the Nation. It must project the national voice and values globally. It must use new technologies to create a real national community at home and a virtual Zimbabwean community by linking Zimbabweans at home with Zimbabweans in the Diaspora. This entails laying groundwork for content infrastructure and building a living, mutually rewarding relationship with independent content producers.

Above all, it means more innovative programming in a way that recognises Zimbabweans are found both at home and abroad, meaning the public broadcaster must pursue a dynamic, itinerant programming policy.

I believe I have put on the table quite some issues which, while not exhaustive, are instructive for us to digest this afternoon so we end up with tasks you have to consider and handle as a Board.

I want to thank you.

Hon. Prof. Jonathan Moyo
Minister of Information, Media and Broadcasting Services

Source - Prof Jonathan Moyo
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