2006年-世界发展银行全球_Corporate_Governance_Country_Assessment___Zambia_48页_1mb

Corporate Governance Country Assessment: Zambia (December 2006)

Core Content

This report provides an assessment of corporate governance in Zambia based on the OECD Principles of Corporate Governance. It evaluates the legal and regulatory framework, corporate practices, and compliance of listed companies, with a focus on public limited companies. The assessment highlights both achievements and challenges in corporate governance, and outlines policy recommendations to strengthen the framework.

Main Points

Importance of Corporate Governance

• Corporate governance involves the structures and processes for the direction and control of companies, affecting relationships among management, boards, shareholders, and other stakeholders.
• Good corporate governance enhances company performance, attracts outside capital, and supports sustainable economic development.
• It is crucial for investor confidence, especially as pension funds increasingly invest in equity markets.

ROSC Assessments

• The World Bank conducts assessments based on OECD Principles, which are part of the Reports on the Observance of Standards and Codes (ROSC) program.
• Assessments are voluntary, focus on listed companies, and include policy recommendations.
• As of June 2010, 71 assessments had been completed in 59 countries.

Overview of Zambia's Corporate Governance

• Zambia is a common law country with key legislation including the 1994 Companies Act and the 1993 Securities Act.
• The Lusaka Stock Exchange (LuSE) issued a Corporate Governance Code in 2005, which is not mandatory but encourages compliance.
• The LuSE Code sets core governance standards and requires companies to disclose compliance with the code.

Key Findings

Investor Protection

• Basic shareholder rights are protected, including the right to participate in AGMs, demand information, and approve major transactions.
• Shareholder rights are relatively well protected during meetings, but meetings are not well attended in practice.
• Takeover rules are extensive but not widely known or enforced due to low activity.
• Shareholders have the legal right to sue for oppressive conduct, but such cases are rare and enforcement is limited.

Disclosure

• Publicly listed companies must disclose annual accounts and material information, often through company websites.
• Compliance with IAS 24 (Related Party Transactions) is uneven, with some companies failing to disclose fully.
• Non-financial disclosures are required, including information about directors, board remuneration, and risk management.
• The LuSE Code requires boards to have a charter and to benchmark their performance, but lacks explicit requirements for board independence.

Company Oversight and Board Structure

• Zambia has a one-tier board system with a maximum term of three years and a minimum size of two.
• Fiduciary duties of directors are based on English common law and are not explicitly outlined in Zambian law.
• The LuSE Code provides guidance on board structure, including the separation of Chair and CEO roles, which is followed in all listed companies with available data.
• However, concentrated ownership by foreign multinationals and the state can limit the influence of minority shareholders and weaken board authority.

Enforcement

• The Securities and Exchange Commission (SEC) has limited resources, with only three staff members, and struggles to enforce regulations effectively.
• The Patent and Company Registrar Office (PACRO) also faces capacity constraints.
• The legal system provides strong shareholder redress rights, but enforcement is hindered by inefficiencies.
• There is no system of independent oversight over the audit profession, and ZICA's role is limited due to lack of capacity.

Recommendations

• Revise and Harmonize the Companies Act and the Securities Act: Incorporate lessons from the UK's revised Companies Act, including explicit fiduciary duties and better management of related party transactions.
• Move Related Party Transaction Protections to the Code or Act: Enhance transparency and shareholder protection by integrating these provisions into the legal framework.
• Revise Non-Financial Disclosure Framework: Ensure comprehensive and consistent disclosure of non-financial information.
• Require Immediate Disclosure of Share Transactions: Mandate that board members and executives disclose any transactions in company shares promptly.
• Enhance Enforcement Capacity: Provide the SEC and PACRO with more resources and support to improve their ability to monitor and enforce corporate governance standards.
• Develop Independent Oversight for Auditing: Establish a more robust and independent system for overseeing the audit profession.
• Support Director Training and Professionalism: Continue the efforts of the Institute of Directors of Zambia (IODZ) to enhance director awareness and training.

Key Challenges

• Concentrated Ownership: The dominance of foreign multinationals and the state limits minority shareholder influence and board independence.
• Low Enforcement Capacity: Limited resources for the SEC and PACRO hinder effective governance oversight.
• Inadequate Awareness and Compliance: Many provisions of the LuSE Code and IFRS are not well understood or enforced by listed companies.
• Limited Shareholder Engagement: Shareholder meetings are not well attended, and there is a lack of mechanisms to encourage active participation.

Conclusion

Zambia has made progress in corporate governance, particularly through the adoption of the LuSE Corporate Governance Code. However, the country still faces significant challenges in harmonizing laws, improving enforcement, and ensuring compliance with international standards. Continued reform efforts are necessary to professionalize boards, enhance transparency, and attract long-term investment.