A look at Directors duties and the role of the Board in Implementing good Governance practices in Zambian listed Companies

Abstract

This paper is an attempt to identify the problem surroimding the implementation of good corporate governance practices by the board of directors in listed companies in Zambia. The need for investors in a coimtry with an emerging capital market like Zambia is critical. The proper control and direction of companies is important for commercial development and wealth creation. It has been empirically proven that countries with good corporate governance attract high volumes of investment easily and quickly. The recent number of corporate failures around the world has highlighted the need to evaluate our corporate governance practices. Good corporate governance requires certain mechanisms to be effective. This paper examines the duties of directors, the composition of the board and the independence of directors as corporate governance mechanisms. It looks at how other countries such as South Africa and The United Kingdom have reformed and implemented these mechanisms. It questions the application of common law director's duties as opposed to statutory duties as is being done in other countries and the aspect of self-regulation when it comes to compliance with the corporate governance codes. It goes on to consider the possibility of codifying the relevant laws and rules of these mechanisms. It concludes by providing recommendations as to what measures must be taken in order to improve corporate governance. If a country does not have a reputation for strong corporate governance practices, investors together with their capital will go elsewhere. Companies with good governance and ethical conduct outperform those which do not.