Staff Writer 
By Bothwell Nyajeka
A READER of this column recently posed the following important question: “As we move into 2026, Zimbabwean companies are transitioning from a ‘comply or explain’ philosophy to a more prescriptive regime under the Zimbabwe Code on Corporate Governance (ZIMCODE II), alongside the growing integration of Environmental, Social and Governance (ESG) standards. How are our companies navigating these new transparency requirements?”
I reflected on this question and paraphrased it as: Are Zimbabwean corporates becoming more rule-based or remaining principle-based in their approach to corporate governance and the implementation of ESG standards?
From my experience working with boards across sectors, the clear trend is that most Zimbabwean boards are moving toward a more rule-based posture. However, this shift is not merely about ticking boxes. It is rooted in a deeper awareness of the responsibilities and risks associated with being a board member.
The days when board membership was viewed as largely ceremonial are gone. Today’s directors understand that their roles carry real legal, reputational, and financial consequences. There is a growing appreciation that being a director is not about prestige; it is about stewardship.
Several developments have driven this evolution, and I wish to address five of the key ones:
1. Structural shifts: Most boards now have a majority of non-executive directors. This structural change has strengthened independence and sharpened oversight. Non-executive directors, by design, are expected to ensure that the organisation operates within legal and governance boundaries.
2. Diverse composition: Board composition has become more diverse. Boards are no longer dominated solely by accountants, human resources practitioners, and lawyers. We now see public service professionals, members of the clergy, academics, politicians and other non-business professionals serving as directors. This diversity brings valuable perspectives, but it also means that not all directors come with deep technical grounding in corporate law or financial regulation. As a result, many directors feel more comfortable operating within clearly defined rules rather than relying solely on principles and judgment.
3. Ongoing education: Formal induction and continuous director training have become common practice. Directors are being taken through structured programmes that emphasise fiduciary duties, statutory obligations, and personal liability. Once directors understand that they can be held personally accountable for corporate failures, their appetite for ambiguity naturally reduces.
4. Past experiences: There is a sobering reality: some directors have witnessed corporate collapses. They have seen reputations damaged and, in certain cases, faced legal action. These experiences leave lasting impressions. They reinforce a defensive mindset, which says it’s better to comply strictly than to explain why one did not.
5. Performance accountability: Boards are increasingly conducting formal assessments of board effectiveness and individual director performance. These evaluations often include governance compliance metrics. The process itself reinforces a rule-conscious culture.
External auditors are also playing a role. They now scrutinise governance disclosures more closely, including adherence to corporate governance codes. Governance is no longer a peripheral matter; it appears in audit discussions and annual reports. This visibility encourages compliance.
In addition, most boards are adopting formal board and committee charters. These documents clearly outline responsibilities and typically embed compliance with corporate governance rules as a core requirement. Once compliance is written into the charter, it becomes part of the board’s formal mandate.
In my advisory work with boards, the dominant question has become what the exact responsibilities of a director are and how they (the directors) can ensure that they execute these duties properly.
To answer that question, boards often request comprehensive governance checklists aligned to the Companies and Other Business Entities Act (Chapter 24:31); statutory instruments that affect State Owned Entities (e.g. the Public Entities Corporate Governance Act – Chapter 10:31,) and ZIMCODE II provisions. Directors want to see what the rules say, line by line. They want to know where the risks lie.
In practice, I also find that most board members are uncomfortable straying far from prescribed rules. Given the choice between “comply or explain,” they would rather comply than explain. Explaining requires judgment, documentation, and confidence that the explanation will be accepted by regulators, shareholders, and the public. Compliance feels safer.
In my opinion, this does not mean that Zimbabwean boards have abandoned principles. Rather, the shift reflects a transitional phase. As the Companies and Other Businesses Entities Act, statutory requirements for State Owned Entities, and ZIMCODE II frameworks become more embedded, boards are seeking certainty. They are building systems, policies, and controls that anchor governance in structured processes.
The integration of ESG standards is further accelerating this trend. ESG reporting introduces measurable metrics around environmental impact, social responsibility, and governance practices. These metrics require documentation, data, and evidence. Transparency expectations are rising, not only from regulators but also from investors, financiers, and international partners.
That said, governance is not meant to be reduced to mechanical compliance. Codes like ZIMCODE II are built on principles for a reason. A purely rule-based approach can create a false sense of security. Real governance effectiveness lies in the quality of board deliberations, ethical tone, strategic oversight, and the courage to ask difficult questions.
In my view, Zimbabwean boards are currently in a maturation process. The move toward rules reflects heightened awareness and responsibility. Over time, as directors gain more confidence and experience under ZIMCODE II and ESG frameworks, we may see a more balanced approach emerge, one that respects rules but is guided by sound principles and informed judgment.
For now, however, directors understand that governance failures carry consequences. In response, they are choosing caution, structure, and visible compliance. In an environment where transparency and accountability are increasingly demanded, that may well be the necessary foundation upon which stronger governance cultures will be built.
Nyajeka is a Chartered Accountant and business leader. He has vast experience as a corporate executive and has sat on various boards in Zimbabwe, Botswana, South Africa and Uganda. He is currently chairman of ACR Solutions and is also a seasoned trainer and facilitator for the Institute of Directors Zimbabwe (IoDZ). For board advisory, executive coaching, leadership development and business turnaround consulting. Email him at: bnyajeka@acr4solutions.com
