Government has reviewed upwards Board Fees and Sitting Allowances for Non-Executive Directors of Public Entities in a move meant to encourage critical corporate oversight by members.
The government last reviewed board fees and sitting allowances for Non-Executive Directors of Public Entities in December 2020 meaning the allowances had been eroded by hyper-inflation.
This may have discouraged some board members from attending meetings and compromised quality of service.
Speaking at post-cabinet meetings yesterday, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa announced the development.
“The nation is being informed that decision to increase board fees and sitting allowances in terms of the Public Entities Corporate Governance Act [Chapter 10:31] was arrived at taking into cognizance the crucial role played by the directors,” said Mutsvangwa.
“The current board fees and sitting allowances had fallen far below the market trends and no longer motivated State Enterprises and Parastatals non-executive directors to devote sufficient time to the business of their entities.”
However, the Minister did not reveal the new figures.
This comes at a time government is in the process of restructuring most of the SEPs to improve viability following years of loss making.
The review of the board fees and sitting allowances is based on the following criteria: categorization of the State Enterprises and Parastatals according to size based on their asset base and turnover; acquisition of current market data for reference purposes (benchmarking); factoring in a chosen market rate into the model to determine the proposed board fees and sitting allowances, and testing of the revenue sustainability of the proposed board fees and sitting allowances for the different State Enterprises and Parastatals.
“Having taken all these factors into account, the non-executive Directors of State Enterprises and Parastatals will be remunerated on the basis of categorization of their entities, which range from small to very large, and premised on assets and turnover. SEP performance will also be an indicator which determines future board fees and sitting allowance reviews”, said Mutsvangwa.
Furthermore, Cabinet approved the bi-annual review of State Enterprises and Parastatals board fees and sitting allowances.
Prior to the 2020 review, it had been reported by local media that Board members for State-entities were pocketing a paltry ZWL$1 000 allowances and fees on average per board sitting which was less than US$12 then, when their counter-parts in the private sector where pocketing an average of US$ 150.
However, critics say the failure by government to publicize the new fees was in contrast to the ideals of transparency in use of state funds.