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CIMA attributes corporate failure to poor board recruitment

CIMA attributes corporate failure to poor board recruitment
By Joan Chirwa
Saturday June 21, 2008 [04:00]

POOR board recruitment and composition has led to corporate failures in a number of institutions, Chartered Institute of Management Accountants (CIMA) Zambia president Victor Nyasulu has observed. Nyasulu said a lot of corporate failures in the public and private sector, including the Small and Medium-scale Enterprises (SMEs) in Zambia, resulted from problems such as poor board recruitment and composition, creating serious strategic business risks.

"However, there seems to be little realisation and sensitisation in the country about this strategic business risk. Professional bodies therefore, have a critical role to play in helping to see to it that board membership is not about partisan cadre pacification, friends and relatives but about shareholder value creation and growth," Nyasulu said.

"It does not matter whether it is non-profit or profit making organisation because in both types of organisations, there are stakeholders that need to be satisfied and so a poor council or board can be ill afforded by corporations and indeed Zambia's private limited companies."

Nyasulu also disclosed that CIMA Zambia would next week sign a memorandum of understanding (MoU) with the Institute of Directors (IoD) for enhanced efforts in advocating for good corporate governance among institutions.

"Consequently the CIMA Zambia branch and the IoD will be signing a Memorandum of Understanding to join hands in advocating for good corporate governance in Zambia, seeing that there is unprecedented economic re-awakening in virtually every sector in the country," Nyasulu said.

The IoD has been championing calls for good corporate governance among public and private institutions as a critical component for business enhancement.

Labels: GOVERNANCE

posted by MrK @ 4:02 AM