, LUSAKA, Zambia, Mar 31- The world is currently grappling with the effects of an unprecedented financial crisis which has exposed the weakness and vulnerability of particularly the regulatory systems in the economies.
Although the crisis has its root in the corporate world, governments across the globe are working day and night to try and save the thousands of companies that are on the verge of collapsing under the weight of the credit crunch.
In so doing, they hope to maintain jobs for their citizens which would in turn support their economic development.
Granted, governments are guilt of laxity in enforcing laws, but the blame squarely lies on the business community’s shoulder for failing to put in place effective, ethical, transparency and accountability frameworks that can promote good corporate governance.
The Boards of Directors in the banks where the economic meltdown started had the responsibility of having ethical standards that would help them to do the right thing which in turn would protect their firms’ from running into financial problems, their shareholders from losing their hard earned cash and the global markets from suffering from their incompetence.
This, as experts point out, is because sound corporate governance practices and principles not only increase transparency, accountability, efficiency and access to capital for the firms but they are also an effective tool of fighting corruption.
There is a high correlation between corruption and economic development and no where is this more evident than in Africa where it is estimated that the Continent loses $140 billion annually through the vice.
So much water has gone under the bridge now and it’s no use crying over spilt milk!
The crisis and the many corporate scandals that have recently been reported and those that continue to emerge provides a perfect opportunity for both States and the private sector to demonstrate that they have learnt a few lessons on how to come up with ethical codes of conduct that can drive transparent and accountable reforms.
They should also strive to keep information flowing through the provision of full, timely and accurate data to keep the public in the know about what they are doing and how they are performing. As the Lusaka Stock Exchange Company Secretary Priscilla Sampa said recently, “Disclosure is the lifeblood of every sector.”
All these are in addition to the governments’ efforts to put in place legislations that support such initiatives.
This is because it has been proven that companies that adhere to ethical standards perform better financially, which means more taxes to the governments which then translates into improved quality of life for their citizens.
But what happens to those firms that still want to live in the old age and insist on doing things in the traditional way? Many corporate governance experts concur that they should not be left to their own devises but should be exposed because as we have painfully learnt, the non-compliance and non-conformity of one company to rules and regulations of the land can have dire consequences not only in the entire sector and economy but to the whole world.
The experts have therefore called on the media fraternity to play an active role in uncovering and detecting corporate malpractices where they are taking place.
“The media is a stakeholder in advancing the principles of corporate governance and they must therefore dig deeper and expose these ills,” Patrick Chisanga, a member of the Global Corporate Governance Forum for the Private Sector Advisory Group recently told a media training workshop in Zambia.