Composition of the Board of Directors The Board of Directors acting on behalf of all shareholders formulates the strategy and

policies of the company. It is therefore important that the board of directors be properly constituted to achieve its mandate from shareholders as contained in the Memorandum of Association and Articles of Association. The board functions effectively if it is composed of the "right people" and has the right leadership. According to the United Kingdom Corporate Governance Code, "The board and its committees should consist of directors with the appropriate balance of skills, experience, independence and knowledge of the company to enable it to discharge its duties and responsibilities effectively. Zimbabwe Stock Exchange Companies as well as other private companies make use of a unitary board system made up of the chairman and three types of directors; the executive director, the nonexecutive director and the independent director. Executive directors are those directors of the company who are involved in the day to day management of the company such as the Managing Director or Marketing Director. Non-executive directors are not involved in the day to day management of the company and are directly appointed by shareholders of the company to safeguard shareholders interests. Independent non-executive directors are distinct from the general non-executive directors as they are appointed to ensure that the board performs transparently and adheres to set corporate governance parameters. This means that apart from their directors fees, independent non-executive directors are free from management and free from any business or other relationships which could materially interfere with the exercise of their independent judgement. The 1992 report on corporate governance, The financial aspects of corporate governance popularly known as the Cadbury report recommended that a board of directors should have a minimum of 3 non-executive directors one of whom should be the chairman of the board. Moreover, two of these three non-executive directors should be independent non-executive directors such that their views will carry a significant weight in board decisions. The size of the board and consequently the number of non-executive directors is dependent on the size of the company as well as country laws in some instances. The code of best practice advocated by the Cadbury report further suggests that the board of directors should create sub-committees to assist the main board to deliver on its objectives. Particular references are given to the creation of the Remuneration and Audit committees with committee members being drawn from the main board of directors. There is no limit to the number of sub-committees that a board can create as long as these committees assist the board in its endeavours. These sub-committees should be composed solely of independent directors to ensure transparency and integrity of company financial reports and are chaired by a non-executive director. The rationale for the formation of these sub-committees is that these committees offer efficient mechanisms to deal with particular issues facing the main board. Despite the delegation of functions to the various sub-committees, the main board remains accountable for the performance and affairs of the company.

New directors to the board are selected by a set nomination committee which reports to the main board of directors to ensure that the directors who are nominated are fit and proper person for the role. The nomination committee, which is a sub-committee to the main board, should be composed of a majority of non-executive directors and be chaired by the chairman of the main board or any one of the non-executive directors. This is meant to ensure that candidates are appointed to the board of directors on merit, not on patronage basis. Relevant skill, experience, knowledge and ability are the main characters considered for potential board appointments. Directors drive the strategy of the company and as such should be properly and adequately trained to carry out their mandate to the best of their ability. The training could be internal and external and should be mandatory for new board members to acquaint them with the operations of the board and the company. Training assists the board of directors to identify corporate governance best practice, helps to foster a positive board culture and creates a platform for future evaluation of the effectiveness of the board. The board of directors should have diversity and composed of both executive and non-executive directors to ensure that insight is shared for the benefit of the organisation. The independent nonexecutive directors should form the majority of the non-executive directors to ensure adherence and promotion of good corporate governance within the company. The independent directors bring to the boardroom, wider experience, impartiality and special knowledge for the benefit of the company. Directors of a company should have the skill and sufficient experience to contribute meaningfully to the achievement of the boards mandate.