Of CEO salaries, corporate governance, corruption

Published: 10 February 2014

Accounting and the function of parliament in Zimbabwe

Of late the local media has been awash with reports of the astronomical salaries being paid to CEOs of parastatals in particular the salaries of Happison Muchechetere at ZBC and Cuthbert Dube at PSMAS. It is reported that Muchechetere was raking in almost US$40 000 plus allowances and perks a month.

Cuthbert Dube was initially reported to be ferrying US$230 000 plus perks a month, that figure, unbelievable as it is to us mere mortals, doubled to US$500 000 last week after his 'retirement' by the PSMAS Board. Needless to say both gentlemen have been silent under the onslaught of accusations of fraud, corruption and a plethora of other charges from an outraged press, public, parliament and the President himself. This is evidence that both gentlemen have access to very good legal advice as they don't want to comment on issues that may incriminate them in the future.

The purpose of this piece is to ask certain pertinent questions that have been ignored in all the hullabaloo raised in the wake of the reports. It is vital to point out that ZBC and PSMAS are parastatals, state owned corporations in Zimbabwe. These parastatals were commercialised along with others in an attempt to turn around their fortunes and generate a profit from their operations. It was hoped that they might pay a dividend to their owners the public of Zimbabwe as well as provide a world class service to the very same public. An act of Parliament was then enacted to commercialise both parastatals. Boards of directors were appointed from the doyens of industry in the country to run these parastatals. Chief Executive Officers were headhunted to steer these public institutions to profitability. It is safe to assume that these individuals were vetted thoroughly and only those of the highest qualifications and experience shortlisted and interviewed. It is also safe to assume that out of this stringent selection process the two gentlemen in question were selected and offered packages commensurate with their qualifications, packages which they both accepted as just rewards for the results expected of them.

The result produced at ZBC was a negligent to zero percent audience for ZTV as programming was so bad that not even Muchechetere himself dared tune in to ZTV at home for fear of being murdered by his family!!! The only people who benefitted were the Nigerian retailers of Wiztech decoders offering access to free to air SABC channels and lately Multichoice Africa. Advertising revenues for SABC soared to record levels as they offered their clients a very wide audience base. In short Muchechetere gave new meaning to the term “scoring one for the opposition”. He singlehandedly, through his terrible programme content launched a new cultural revolution in Zimbabwe as people were exposed to the influence of SABC programmes. Notwithstanding this state of affairs the board running ZBC saw fit to pay him his salary and avail to him funds for his various perks. To state the obvious Muchechetere was performing his duties to the expectations of the Board and hence he was rewarded.

Over at PSMAS old Cuthbert raised subscriptions, lowered coverage (which increased shortfalls for his impoverished members) and did not pay service providers resulting in them turning away his sick members and managed to pile up an unserviced debt of US$40 million. To top it off he created an investment vehicle, the PSMI, of which he sold to himself a 20% share. A CEO of a parastatal buying 20% share of an investment vehicle of his employers!!! Apparently the PSMAS board were so pleased with this performance that they continued paying his indecent salary and even allowed him to put up his portrait in every office of the medical aid society next to the president's portrait, although fittingly his portrait was slightly smaller.

At this point it should be pointed out that both Muchechetere and Dube were employees of the corporations and answerable to their respective boards of directors. These boards of directors were in turn answerable to the ministers who in turn reported to the cabinet and the presidency who in turn are accountable to the parliament who enacted the act which created the two corporations. There are mechanisms in place to govern the running of the corporations and structures provided for accountability to the people chosen to run the corporations on behalf of and for the benefit of the public of Zimbabwe. In theory both Dube and Muchechetere were reporting to their superiors right up to the top. The buck has to stop somewhere and in my book this particular buck stops on the doorsteps of the parliament and the mandarins sitting on those hallowed benches and dreaming of their allowances instead of performing their oversight duties. The buck stops at the doors of the ministers and cabinet who are busy feeding at the trough and positioning themselves in the endless succession battle of Zanu-PF to bother about their sworn duties. The buck stops on the lap of Robert Mugabe who is too busy outfoxing and outliving his comrades to carry out his sworn duty to lead the country out of poverty.

There is no doubt whatsoever that Muchechetere and Dube are as corrupt as traffic cops but they were allowed to carry out their nefarious activities with the silent blessing of a system which failed to implement available legislation and regulations concerning corporate governance. I don't buy the hogwash that no one at the rotten top knew what was taking place ZBC and PSMAS. Everyone now knows that Cuthbert Dube, besides his lucrative job at PSMAS was also Board Chairman at ZBC where he oversaw the operations of Muchechetere. Dube is also President of the perennially broke ZIFA whom he is in the habit of bailing out from his own pockets. It was always a wonder where he got the funds to sponsor a national team, well we now know. Probably it was his conscience troubling him, although I will be the first to doubt if he has a conscience. At ZBC Dube is reported to have approved housing loans for Happison and two other top managers reportedly retorting to the board that the CEO was his prerogative. And the rubber stamp board members mindful of their sitting allowances tucked in their tails and allowed him carte blanche powers. No matter how much cheap Chinese perfume is poured on this affair it stinks to the highest office in the land.

The biggest question needing to be pondered is: if all along the powers that be were aware of the above goings on why is this dirty linen being hung out only now? Is it because someone at the looting trough has suddenly developed a conscience? Highly unlikely!!! Is it part of the devious and hopelessly convoluted succession politics in the corrupt behemoth that is Zanu-PF? More likely!!! A word of warning then to the whistleblower: We are not fooled by this coming clean. We urge you to apply the principles of corporate governance at our parastatals and stop turning them into jobs for the blue eyed boys of the party. Poor Cuthbert and Happison are sacrificial lambs in this scheme of things. But we are not wasting our sympathy on them, for they will be comforted by their huge retirement packages. Everyone from the President, the cabinet, ministers, permanent secretaries and board members should hang their heads in shame for being exposed sleeping on the job. Cuthbert and Happison should be hung by their heads and measures taken to recover the monies they swindled from the state.

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Patrick Ndlovu can be contacted at pndlv55@gmail.com

- Patrick Ndlovu