TMCnet News
Airzim Mired in Another Storm(AllAfrica Via Acquire Media NewsEdge) Air Zimbabwe is caught in another storm after it emerged that its acting board chairperson Mr Abdulman Eric Harid doubles up as the airline's general manager responsible for finance in breach of tenets of good corporate governance. The Parliamentary Portfolio Committee on Transport and Communication chaired by Epworth MP Cde Amos Midzi (Zanu-PF) queried the anomaly, saying the arrangement was likely to create a conflict of interest. Government recently proposed a National Code of Corporate Governance which prohibits a senior member of management of a firm from doubling as a board member. The code makes it mandatory that no chairperson or board member of a company should double-up as a chief executive officer of the same company. Where that is unavoidable, such appointments should be approved at an annual general meeting. In terms of the code, the roles of the chairperson of the board and chief executive officer should be kept separate and, where the two roles are merged, special reasons for this should be disclosed. The provisions of the code have since been conveyed to Government Ministries and departments through the Chief Secretary in the Office of the President and Cabinet, Dr Misheck Sibanda. But during deliberations in Parliament yesterday, it emerged that Mr Harid was playing the dual role to the possible prejudice of Air Zimbabwe. This was after the board and management had been invited to give oral evidence before the committee on its operations. Glen Norah MP, Mr Webster Maodera (MDC-T), asked Mr Harid, who was giving evidence, if principles of corporate governance allowed him to play the dual role. It emerged that as general manager responsible for finance, Mr Harid reports to acting chief executive officer Mr Edmund Makona, but when he plays his role as the acting board chair, Mr Makona reports to him. "I have the advantage that I came a little early where I was general manager responsible for finance. At that time I was reporting to the CEO," said Mr Harid. "When we found ourselves in this, I said since we had already established a rapport with the CEO, I said on management issues I report to you, but as far as board things are concerned you report to me because we wanted this thing to work. If Honourable Members have got a better way of helping us out we will be glad to have it." Cde Midzi was not convinced and said such an arrangement was awkward and not in line with the principles of good corporate governance. In his evidence, Mr Harid said the national airline was saddled with a debt overhang of US$331 million. He said there was need to adequately fund the airline to reclaim its place in the aviation industry so that its engineers and pilots were not poached by "vultures" from the Middle East. There was need, he said, to support Air Zimbabwe so that it returned to the International Air Transport Association, a development that would enable it to ply international routes such as London. In his evidence, Mr Makona said most of Air Zimbabwe's planes had outlived their 20-year lifespan, meaning it was spending more on maintenance cost. "This means there is a lot that has to go on maintenance and fuel," he said. "There is now need to modernise the fleet of Air Zimbabwe. Air Zimbabwe must be a must for every Zimbabwean." Mr Makona said there was need for Zimbabweans to appreciate the importance of a national airline and avoid shunning it for its competitors. He said it emerged at a meeting of airlines he attended two weeks ago that only Ethiopian Airlines had made profit in the past two years. The major cost driver of airlines, he said, was fuel which he said was 30 cents more expensive in Zimbabwe compared to South Africa. Copyright The Herald. Distributed by AllAfrica Global Media (allAfrica.com). |