Shame Mugova Durban University of Technology Durban, South Africa Corporate governance, structure and accountability as affected by national government infrastructure in developing countries Presented 26 May 2016, Rome International Conference “Past and Future of Corporate Governance: Practices, Reforms and Regulations” Shame Mugova Durban University of Technology Durban, South Africa mugovas@gmail.com   Paul R. Sachs NHS Human Services Philadelphia, PA, USA  

Models of Corporate Governance Anglo-Saxon model Continental model Implications for developing countries

Challenges of business operations in developing countries Governance Financial Infrastructure Legal Infrastructure Marketplace Supply Chain Government involvement in markets

World Bank Group - Rankings www.doingbusiness.org Zimbabwe Italy Rwanda South Africa USA   Overall Ease of Doing Business 155 45 62 73 7 Starting a business 182 50 111 120 49 Dealing with construction permits 184 86 37 90 33 Getting electricity 161 59 118 168 44 Registering property 114 24 12 101 34 Getting credit 79 97 2 Protecting minority investors 81 36 88 14 35 Paying taxes 145 137 48 20 53 Trading across borders 100 1 156 130 Enforcing contracts 166 127 119 21 Resolving insolvency 152 23 72 41 5

Zimbabwe - Banking sector - I Financial infrastructure Currency Central Bank Indigenisation and property rights protection Financial market Lack of confidence Liquidity constraints Reckless lending

Cash shortages –Bank queues

Proposed Zimbabwe Bond Currency

Zimbabwe – Banking sector - II Legal Infrastructure Lack of secure property rights Politicisation of legal system Indigenisation efforts Supply Chain Lack of lending vehicles Unbanked currency

Zimbabwe – Banking Sector - III Government involvement Politicisation of financial management Lack of forceful central bank authority Weak surveillance and monitoring

Zimbabwe – Manufacturing Sector - I Financial infrastructure Low foreign investment due to political risk Exorbitant lending rates Legal infrastructure Indigenisation Poor property rights protection Poor law enforcement

Zimbabwe – Manufacturing Sector - II Market High production costs including overhead and utilities Power outages Cheap imports Supply Chain Outdated manufacturing principles Weak transport and logistic infrastructure

Zimbabwe – Manufacturing Sector - III Government involvement National corporate governance code Import duties Manufacturing standards

Recommendations - I Parliamentary legislation to support National code of corporate governance Credit reference bureau at Central Bank Laws to protect investment and property Judiciary reform to remove corruption Improved surveillance by regulatory bodies Establish Corp Governance index on ZSE

Recommendations – II Balance tradition and best practices to create sustainable governance structures Reform the Anti-Corruption Commission so it can fulfill its mandate Make board appointments based on competence and expertise rather than political ties