Leya Mtonga Ngoma

than you very much good morning to everyone good morning good morning that's better thank you very much as already introduced my name is LAM Tanga I am here as a corporate governance expert and today I'm going to speak to you about the fundamentals of corporate governance for small to medium Enterprises uh just by a show of hands who is an entrepreneur in here aspiring an inter entrepreneur very good thank you so I'm speaking to entrepreneurs or aspiring entrepreneurs uh students from the University and I want to believe other occupations uh rodri are you going to help me with the um moving the slides okay so if we can go to the next Slide the next slide is basically my um qualifications I won't go deep into them because I think I've been introduced um but just to mention that I am a certified professional in in corporate governance and ethics and I'm also a certified stock broking and investment advisor the qualification I have from the Massachusetts Institute of Technology is called Legal Tech in the digital era so it's got a lot to do with uh bringing lawyers to speed with the Advent of Technology next slide please so what is an entrepreneur do we know what an entrepreneur is do you know what you are those who rais their hands as entrepreneurs do you know what you are you know who you what you are can anybody volunteer without looking at the screen I'm the only one is allowed to look at the screen right now an entrepreneur is an individual who identifies creates and exploits opportunities by launching and managing new Ventures often characterized by Innovation risk-taking and proactivity entrepreneurs are driven by the goal of transforming ideas into profitable Enterprises is that what you described yourselves as so I'd like you to just Identify some punch words in this definition there's the word Innovation risk taking proactivity and transformation of ideas into profitable Enterprises I'm sure all of us would like to make some money even a lot of money like Elon Musk who would like to be like Elon Musk why because he has a lot of money and any other reason Innovative do you think he takes risks a lot of risks like acquiring tritter was that a risk why I'm told you a bit of backlash for for acquiring Twitter and changing a lot of things um but yes even I'd like to be like Elon Musk some parts of Elon Musk not not all the part the parts like the many children he has I'm not really interested in that um next slide please the key characteristics of anart entrepreneur Innovation risk-taking Visionary I'll stop here or pause here for a while um an entrepreneur is expected to be Visionary what is a vision what is a vision what is a vision statement I'm sure you've seen a vision statement and a mission statement in a lot of Institutions isn't it they have this poster which says our vision and our mission do we understand the difference so your vision is what you'd like to be in the future and your mission is how you're going to get to where you would like to be and so an entrepreneur must be Visionary you must be able to be forward looking and visualize what you would like to be otherwise then you're wasting your time not so leadership an entrepreneur um is somebody who should be able to lead why because their Vision carrier isn't it you have your small business and you know where you want to get it but you have to work with people isn't it so you're are going to have to lead people influence their behavior towards your vision flexibility when you have a vision sometimes there's a tendency of you being too focused on the vision and you don't want to listen to anybody else because the vision is yours isn't it and you feel as though you're the best person to uh explain the vision or even to execute it but you have to be flexible you bring in people in your team for different reasons and different skills isn't it I may be a lawyer but I need an accountant and so I must be flexible to be able to um uh tolerate or even understand or bring on board what the accountant is proposing for my business next slide please the definition of Entrepreneurship entrepreneurship is the process of Divi designing launching and running a new business which typically begins as a small Venture and evolves through various growth stages it involves identifying Market opportunities developing business models securing resources and bearing risk risks with the aim of achieving profit and growth do we agree with this so as an entrepreneur do you envisage yourself growing Beyond uh being a small to medium Enterprise that's your vision isn't it so entrepreneurship is not just for smes it's even for large operations like Microsoft I think um the Proprietors of Microsoft are still described as entrepreneurs isn't it but their businesses are huge and so um you start small because you've been Innovative you have an idea which you need to grow and um you want to see it as a large corporation hopefully identifying Market opportunity ities as an entrepreneur how did you decide that you want to go into a certain Market you saw an opportunity isn't it you saw an opportunity um the in terms of people needing to eat lunch at 1:00 and you decide to put up a burger joint or something cuz you've seen the market and maybe you go to the industrial area where there are a lot of people who don't have time to cook uh but need something to eat securing resources Capital isn't it you need Capital to be able to to uh attain or achieve your vision not so most of the time you need resources and resources is not just Capital it's also expertise um you know uh assets and things like that bearing risks so I I think in every Market there are opportunities but there are also risks isn't it and so you need to have a plan on how you're going to uh mitigate or avoid those risks and what that is called is um risk management and at the end of the day you want to make a profit isn't it when you look at what you've put in and you look at your expenses what is remaining um as a surplus would be your profit and they should be enough to put back into the business so that it continues to grow next slide please key elements of Entrepreneurship OPP opportunity recognition I have spoken about that identifying unmet needs um or Market gaps I think opportunity is about seizing something isn't it you seese the opportunity um because you have seen unmet needs or you have seen gaps that can be addressed by your innovative solutions business planning this is very important um you have to plan your business how are you going to utilize the capital that you have so that you can be able to run a business as a going concern next slide please resource mobilization we have spoken about that execution implementing the business plan that's where uh things like teams come in how are you going to implement this dream of yours what do you need to be able to achieve your vision adaptation and growth we've spoken about growth um just to comment on adaptation adaptation is finding a way to exist with uh changes in your environment rather than cowing down and saying there's too much of this I can't do business you should be able to rise to the occasion and adapt to the situation and continue to be Innovative next slide please I'd like to illustrate um by way of a story so that we can um have some context in terms of uh where we are going with with the presentation so this is a short story about young lady who from a very young age seemed to always know what she wanted in her life and she developed a sense of fashion at a very young age and so she was very selective even with gifts of clothes and things like that she was able to say oh this doesn't work for me and things like that um so when she was in 10th Grade she we uh did a vision board do you know what a vision board is we know what a vision board is so it's it's um a piece of paper or usually they use cardboard and put pictures and things like that but it's a futuristic story it's you speaking to yourself about where you want to be so she did a vision board in the 10th grade and like I said um she's always known what she wants to be and in her vision board she wanted to study uh cosmetics and Beauty therapy and she started off with um making things at home products at home and going to sell them to her colleagues she took time to understand uh the skin and hair needs of her colleagues and because she was the same age as her colleagues she was able to relate and provide uh products which she thought her colleagues would like and so her parents gave her some money uh to buy the raw materials but there were very strict rules around uh that Venture so her teachers were involved involved and were collecting all the money and sending the money to her parents who were putting it away uh for her and so she was making natural soaps scrubs lotions and so on and selling them out to her colleagues next slide please and so on her graduation day apart from graduating she did a little business on the as side managed to hire one of her colleagues to be her assistant and she did makeup for her colleagues at a fee when she came home um After High School um her parents gave her the money with a little interest and she went and bought some uh equipment for her to use for her passion at the time she went ahead and opened an Instagram page and suddenly was getting bookings to do makeup for for people and um her parents supported her um by reserving a room at home where she set up her her her her little business next slide please so during her Gap year this young lady became a little bit anxious because her vision board was saying she would go to a very renowned beauty school and that cost a lot of money isn't it it required her to travel and it required that her parents were able to to support and so she became anxious faced with the possibility that perhaps she won't go to this uh institution and she decided decided to uh do a local uh training in professional baking and according to her um she was diversifying her business but also relating um what she was doing to her vision and she thought that her clients wouldn't mind having a slice of cake at a fee at her Spa so when it came to uh discussing her further education she pulled out her vision board and made a case to her parents I need to do this and her parents luckily agreed and she is now at that same institution um studying and she works parttime um to get that much needed experience um and hoping that she'll come back and set up on her own and have those uh high standards so this young lady is actually my daughter and uh she's a very feisty individual always um knowing what she wants in life and I think because she's always had to justify why she wants to do something she's become very good at explaining her vision and where she wants wants to be but I would like you to ask yourself a question is this young lady an entrepreneur um from from her experience so far and for us to bear this story in mind as we now begin the actual presentation so what I was talking to you about is being an entrepreneur what entrepreneurship is and I've given you a an illustration so next slide please so the outline of our program is that we'll look at an overview of corporate governance we'll look at structures of corporate governance regulatory framework of corporate governance internal controls and systems external audit financial reporting strategic planning and evaluation we'll look at a Board of Governors and corporate governance for small to medium Enterprises as I put a question mark because I've been asked a lot of questions about whether corporate governance applies to small businesses who has that question okay a few of us have that question and we look at the impact of the fourth Industrial Revolution on corporate governance and then we'll look at some Stress Management who has stress in their business I'll be surprised because there there are so many reasons for you to be stressed in your businesses right now um and we'll learn um how to manage stress and that will be the end of the presentation um ready for Q&A the definition of corporate governance I've selected um a uh definition from the Cadbury report on corporate governance and it's defined as the process in which organizations are managed and controlled do you agree so what's the difference between managing and controlling where is there more power in controlling yeah we've got a very clever crowd here um so in considering the context of corporate governance best practice it's proposed that a holistic approach be taken where the organization its internal and external environment and factors are seen as relations to one another so corporate governance is something that should be taken holistically and those who have read my profile will um see that I'm also passionate about organizational behavior I don't believe that corporate governance and organizational behavior can be seen separately they they they work together they are married because corporate governance is about the structures and the processes isn't it you have your board you have your management and all that but then in those structures there are people and that's the behavior part of it the people the corporate actors next slide please in terms of the sources of corporate governance we look at Zambia in particular so we have legislation which are the laws we have legal precedent those of you who are studying law uh legal precedent is um law that is made through judgments so you refer to uh judgments of the court to be able to explain um some legal issues corporate governance best practice um so there's an African uh code of governance I'm sure you have heard about the king's code of corporate governance anybody no Professor Marvin King yes so Professor Marvin King is a South African National and um he founded uh the king's committee on corporate governance for the Republic of South Africa but the code is very famous because it has International ACC claim and Zambia uses the king's code um in terms of where to get uh corporate governance best practice constitutional instruments these are um documents or instruments that a company would use like articles of Association we are aware of those who's got a company who has established a company okay so you must know what articles of Association are okay um in certain societies they they have what is called a constitution of of of the society those are constitutional instruments professional rules practice and ethical standards so in an organization you have lawyers like I am a lawyer working for IDC but they accountants isn't it at IDC they're also investment professionals and they they have rules that govern their practice and those are also part of the um regulatory framework in corporate governance um in terms of the factors affecting the practice of corporate governance um most corporates or should I say all corporates have a personality your company is separate from you it's also a person isn't it I'm sure you've seen cases so and so versus ex limited it's that company that is being sued and at law it is considered as a person except that it's not a natural person it is a juristic person and it acts through natural people um and bringing the corporate to life uh this is why I was saying you can have structures but if there are no people then the the company will not be able to live and so uh if there are no people if there's no money for the operations if there's no investment into the business then it will not be alive the health and growth growth of the corporate we've spoken about what are your plans for your business isn't it how do you intend to grow it but as you are growing it you'll be constantly checking on how healthy it is are you uh breaking even are you making a profit okay um the the rights and liabilities of the the shareholders of the company so you're a shareholder what are your rights you're entitled to a dividend if one is is is declared that's your return on your investment into the company and uh there are certain liabilities that you you have as shareholders so who has a limited liability company somebody has a company here is it called X limited yes yes so what does the limited mean that your liability yes towards uh the company is limited to what is unpaid on your shares so sometimes you will be allocated 200 shares and you pay for a 100 and the other 100 is payable later when the company's in trouble it can make a call on the shares and and your liability towards for example the 10 million that the company is owing will be limited to what you have not paid on your shares that's what it means and it's also a demonstration that the shareholders and the company are two separate people okay so we have okay technology issues um related to what I've just spoken about there's what is called the veil of incorporation this is the protection that the shareholder has uh against uh liabilities in excess of what is unpaid on the shares um then you have your governing body which is your uh the structures okay so you have the shareholders who are the investors um but they also a structure then the investors uh devolve power to manage the company to a board of directors which delegates to uh executive management I'm sure you're aware of that so you have a board you have your CEO isn't it I'm sure those of you with small Enterprises call yourself CEO and founder isn't it I've seen a lot of that on Linkin okay um and what these uh structures do so um the control sits with the shareholders remember we had said corporate governance is about management and control isn't it so the control sits with the shareholders and the management sits with the board who delegates it to Executive management and then you have the other structures under um the management next slide please so here I'm just going to quickly uh speak about the theories of corporate governance so there are two theories of corporate governance there's the agency theory and there's the stakeholder Theory so the agency theory is the older of the two theories and it Advocates that the board remember I said that the board is given Power by by the shareholders to manage the company so this Theory Advocates that the board is an agent of the shareholder and does what the shareholder wants that's the agency theory it's like you know you want yango to bring a package to you isn't it you're the principal they're the agent and they will you know deliver the package on your behalf in accordance with your instructions isn't it so that's the agency theory then there is a stakeholder Theory which Advocates if we can go to the next slide that for a company to succeed it must take into consideration the interests of its various stakeholders so what are stakeholders these are institutions or individuals that have an interest in the organiz ation and may not necessarily be shareholders so under this Theory the shareholder is but one of the stakeholders so they're internal stakeholders and external stakeholders so the internal stakeholders are your employees those are internal stakeholders the board is also an internal stakeholder and so is the shareholder because of the uh organizational structure the regulator the government those are external isn't it so if you do your business outside the law someone from the regulator will come for you and because they're interested in you doing your business in accordance with the law they will be interested in how you're doing your business your Bankers so if you're going to get a loan for your business your Bankers are in interested those of of you that have obtained loans from the banks I think the bank will ask you so how are you going to pay back and then you say oh okay these this is what I intend to bring in this is what the cash flows look like and then they Advance you the money but they don't stop there they're interested in knowing whether you have used the money for that uh purpose and that you make enough money to repay the Al next slide please structures of corporate governance we won't we will just cruise through this [Music] um so um I have spoken about the structure of an organization um and it's important for us to bear in mind um that the stru structures are seen from an uh internal and external uh perspective and uh the external perspective relates to the political social technological environmental and legal framework so that's the external uh aspect remember I had asked uh who is stressed we've got environmental issues in this country isn't it we've had a drought that's Environmental and it has affected businesses and so that is the external uh perspective next slide please we have already spoken about uh in terms of the framework but um we will now look at the internal uh control processes external audit and financial reporting um a little later on so we have spoken about regulation but at this point just to give you uh the broad category so there is uh mandatory regulation which is the law isn't it that you have to follow if you're doing your business then there is self regulation and voluntary regulation I've spoken about the king's uh code in Zambia it's voluntary so it's not part of the legal framework but if you want to practice in the best way way possible you will adopt some of the recommendations in the king's code the self-regulation is things like articles of Association policies of your organization that's what the rules that you make for yourselves next slide please internal controls and systems internal controls are are defined as the procedures or practices within an organization that help the organization to achieve its targets So within your your business who is checking on whether you are following the processes that you have put in place those are internal uh controls so before you make a payment what do you do you get a quotation you get some kind of approval and then you proceed to draw a check isn't it or make the payment online all those are controls so that you're not using the money for a purpose other than what it is intended for um internal systems is a Col is the collective of all those uh instruments of control next slide please next slide external audit I'm moving very quickly because of the time so an external audit is an exercise where a an external auditor comes in to review your books of accounts so you will need someone to provide an opinion of the financial affairs of your organization and um in a company uh the external Auditors will provide this opinion to the board to own and then go to report to the owners of the company the shareholders about their performance so I'm sure we we know what uh financial statements are management accounts so the management will prepare the statements and the external Auditors will provide an opinion as to whether those accounts are in order and their International uh standards of reporting I'm sure you've heard about ifis if standards uh those are the standards that the external Auditors would check for uh in terms of opinions there number of opinions that the external auditor can give so the best opinion is an unqualified opinion meaning that everything is in order what management is saying on the papers is what is actually going on in the company then there's a qualified opinion which is not as good because it emphasizes certain uh matters that require attention then there's uh what is called a disclaimed opinion uh which I think is is is something you don't want to have because the Auditors are saying you haven't given them enough information to be able to provide an opinion um and uh the extern Auditors are supposed to be independent so they come from outside the company NeXT slide please um I have already spoken about the responsibility of the board for preparing the uh financial statements um remember i' spoken about delegation so it delegates to management and management does this work and takes it to the board and it goes up um next slide please financial reporting so this is related to external uh audit but it is what happens internally so the external Auditors don't prepare the financial statements the financial statements are prepared by management um and the definition is the disclosure of financial results and related information to management and external stakeholders including investors of a company as a going concern over a specific period of time so usually the financial reporting will be over a one-ear period uh according to the company law every year a company is supposed to produce financial statements the punch there is that this document will inform stakeholders for example the the shareholders want to know what the financial health of the organization is because if it's not doing well and they're getting agitated maybe they want to sell their shares but they can only be informed by a report uh with disclosure such as this next slide please I've spoken about the the standards uh the international stand standards um but also here just to speak about an integrated report this is the modern way of reporting where we report more than just the numbers okay I'm sure you've seen uh financial statements or old financial statements just black and white figures tables and so on but now um the uh reporting has evolved and you would include issues of strategy governance and uh even CSR which is Corporate social responsibility so there's more information that is given to to stakeholders in the integrated reporting um method next slide please strategic planning what is strategic planning what is a strategy how you're going to achieve your vision you strategize isn't it today I'm going to do this next month I'm going to do this in 6 months I'm going to do this that's strategy so before you go out and Implement you must have a plan as an entrepreneur you must have a plan like this young lady you know to posture for Capital to posture for further education how is she going to do that strategize catch my mom when she's in a bad mood or a good mood so that she can give me the money and and things like that so that is a simple uh definition of strategy but in a company strategic planning is the documenting and establishment of direction for a business that's the uh um formal definition a company should assess where it is remember we had spoken about you uh looking for opportunities and met needs gaps and things like that you should be able to assess where you are where are you where would you like to be how are you going to do it and what are your values so there are ethical ways of doing your business and unethical ways of doing your business but in in planning you must identify what your values are what your core values are competence would it be a value for you transparency diligence so you have to identify what what are we about what is our work ethic what will help us to get to where we would like to be so the responsibility for a strategic plan Li with the board in a company so management will do all the ground workor but the Strategic plan will be approved by the board and that's the document that the board will use to oversee what management is doing this is the plan what is your report why haven't you done this according to the Strategic plan you're supposed to be here that's the document that they use next slide please Board of Governors board of directors so as an organization you have a board of directors what do these people do they direct remember the the the the definition of corporate governance management and control so in terms of management there's Direction they resolve uh and guide management so this is what the board of directors do um companies should have a balanced board people who can properly direct management isn't it especially in a professional environment you need somebody who understands numbers on your board isn't it you need somebody who understands the business you need somebody who understands uh human uh um relations or human capital so best practice is that your board should be balanced with the necessary skills that are required for someone to be able to make these big decisions or the group to be able to make these big decisions decision making should take into account principles of accountability transparency responsibility and what is in the best interest of the company so this group called The Board of Directors doesn't just make decisions Willy nearly like that okay so they are supposed to incorporate certain ethical uh practices uh to be able to arrive at decisions and uh the way that they arrive decis at decisions is usually established as well so you'll find that the articles of a Association say that decisions will be made by majority isn't it so you can be seven of you if one of you has an issue with the decision and the other six are okay with it then the board has made a decision not withstanding that one person has dissented then there are other structures for example the the biggest shareholder will will appoint some some directors and can also uh insist on certain things like for example a quorum cannot be formed if there's no representative from this shareholder this is all in an effort for uh to uh protect interests remember I said stakeholders so the shareholders have an interest in the company and one of the things they do is they have authority to appoint who is going to manage the organization on their behalf so to be a director there are certain questions you need to under to ask yourself do you understand corporate governance like you will understand or your understanding um next slide please do you understand the company's strategy do you understand the process of decision making do you understand the adage nose in fingers out no I've said the board makes decisions but doesn't Implement them and so it's nosy about what's happening with their decision but it doesn't do the the the running around so the fingers out is stay out of the operations make the decisions there's a separation between the board and management do you know what your seit looks like I've been introduced as chief of something isn't it SE suit means Chief suit that is the executive arm of management the senior Executives do you know what they're about do you know what they are supposed to be uh doing in the organization and what their structure is in terms of ethical IAL considerations I'll just tell you one thing I'm sure you'll be availed these slides so uh ethics has one Golden Rule treat others the way you would like to be treated so the fact that you are the CEO and founder of your organization doesn't mean that you treat people with disrespect because they're not the owners that's an ethical behavior um there are a lot of principles of ethical Behavior but I'm sure with reading these slides you'll be able to read a little bit more about it next slide corporate governance for small to medium Enterprises which is what we are predominantly um is there corporate governance for uh smes I think uh a lot of people ask those I'm too small to have a board you know you are putting these are expenses I have to pay these people but you have Incorporated a company which uh is established under a piece of legislation which requires you to have a board but it's given you a minimum two directors that's your board you start to increase with capacity so yes smes still have to obl you still need a structure that is called a board you have shareholders I have a little business with my husband we are shareholders we are also directors and I'm also the company secretary cuz the law allows me to do that and I just wanted to demonstrate to you that you can be small but you can still comply with the corporate governance requirements um we've spoken about this uh having a strong and independent board the Right Mix and people who are ethical and that they should be clear roles remember i' said nose in fingers out and the same thing applies to to shareholders except the shareholders are a little bit special they can actually interfere uh in certain ways because they're allowed to there are certain powers they they keep to themselves um in order to protect their interest for example if you want to dispose of a major asset in the company as a board of directors you need Authority from the shareholders next slide please so uh these are things we have already spoken about and just for you to refer yourself to the uh illustration that I gave uh it's always good to to um relate these Concepts to some some story it's easier to understand so always bear that in mind next slide please I've spoken about Regulatory Compliance engaging stakeholders actively maybe what I can say here is that according to the stakeholder Theory you are supposed to manage your stakeholders make sure that you have enough money to pay off that loan every month okay make sure you are complying with the with the law and where there are difficulties find a way of engaging uh your stakeholders so that you can manage the risk strategic planning you're also expected to do that at whatever level doesn't have to be a big glossy shiny document which you'll pay thousands of qua to get printed my strategic plan for my brand is not even printed it's a soft copy three pages of what I'd like to do in the next five years and every year I beef up whatever that thing I'm supposed to do in that year um continuous Improvement like you're doing now you're learning I am always learning and so so continuous development is very important Trends change and so there's need for you to to refresh yourselves and in your company have a program for continuous development at whatever level it can be small it can be about uh getting your team to understand your product and uh teach them in that regard leveraging on technology we'll look at um um this a little bit in more detail but uh you are not excused from the fourth Industrial Revolution we are aware of four 4 I we are Millennia I've seen a lot of Millennia in here you work on your phones everything is on your phone it's because of the fourth Industrial Revolution the Advent of technology and so even in business we cannot ignore technology who has airel money who uses Airtel money mobile money all of you use it isn't it who has the uh online banking yeah that's technology all of that is sitting on a bed of technology and um next slide please uh this era is here to stay and the difference between the other uh Revolution and this one is that the growth is exponential something happens in the UK in terms of Technology the same minute you in Zambia can use it and somebody is in Zambia is developing something based on that uh so uh it's not going anywhere um but and we have to structure our businesses to adapt remember I've spoken about adaptability so whereas you had uh all these reports in bunches of paper and all of that everything is sitting in some file on your PC and maybe there's a disaster recovery site as well uh for example for board meetings I don't print all those board packs for every member anymore I have an online um board meeting portal so everything is done online I keep my hard copy because that's my my duty I need to keep a hard copy to manage the risk if my computer crashes and everybody's computer crashes at least I have a hard copy so I'm managing my risk but the point I am making here is that technology is here to stay and you should embrace it and use it in your businesses no point in walking to a booth when you can get the app no point in walking to the bank when you can actually do online uh banking only go to the bank when you think they've stolen your money and you have to make a lot of noise um next slide please so from this perspective of corporate governance in 2025 it's predicted that America will have its first artificially intelligent board member did you know that so you'll be talking to a machine the board meeting um and so here I have just highlighted the kinds of technology so there's blockchain uh smart contracts and things like that and the value is in the data data is King you've heard about that processing of data is Big Business now but what it has done is that for example for lawyers we now cannot bill for some Services because they're in in the blockchain and our clients can can interface with with that system and so we have to think of other ways we have to be Innovative with our uh product ranges even the rate at which business is going lawyers don't now have that luxury of taking X minutes minutes are reduced so you need tech technology to help you next slide please Stress Management it's a very short slide next slide everyone deals with stress at some point and no person is immune from stress okay and the pitfalls of life so just in case you thought you were the only one everybody has stress okay because we exist in in an environment uh that we may not even have control stress tends to exhibit when we are tired when when we are sick sometimes we can get sick because we are stressed one of the ways of managing stress is to effectively plan we've spoken about strategic planning isn't it plan so that you can even identify the risk there's a risk that I'll get stressed if I go at this speed so maybe I should plan for a little holiday in between that's how you manage stress um and taking on too much and usually that is a sign of failure to plan and not knowing your team or Your Capacity so when you take on too much you become stressed and even the thing that you are able to do properly you will not be able to do because you'll be sick or tired um one of the other ways of managing stress is you need to add quality to your time okay what you like to do to relax make time for it and have a value around it so that when you're done with that activity you're rejuvenated you think more clearly um when you allow yourself to relax I think the next slide is the end the next slide must be the end thank you very much for your kind attention I hope I haven't taken more than 40 [Applause] minutes they can hear me I'm I'm okay thank you so much for that presentation I found you we were expecting some good value from you but I think you've actually exceeded the expectations here this is what we have experienced here is years and years and years of experience given to us in a crash course kind of format so thank you Le for your presentation your time and your preparation and your delivery very methodical I love the pace of your presentation as well the loudest to follow you on as you were as you were presenting please we'll take some questions now guys I'll let player as you see the hands feel free to point out who you would like to ask the questions we can now deliver some questions to theol thank thank you U I think I'm so can you just start with your name so just give us your full name and then your question sure think my name is Ken and I think under 15 minutes I'll start by just appreciating when I head to corporate sh I was expecting a lot of Ja but I think presentation has been very easy to understand and easy to follow thank you so much is just around the interest on implementing corporate governance Ines and I feel there still need to be conversation in that um using the example that you give us the story My question is this how does corporate governers come and play in an when mostes are not limited companies but are s Trader kind of businesses uh by so TR I mean you are the founder you're the CEO you're the accountant the director you the media because everything is centered on and of course you don't have the resources to be able to expand and it will take a bit of time for you to grow those so how really in reality we have a lot ofes in Zambia we have rodri is running sing um free and she's managing the business she's able to pay school fees but she doesn't have corporate governance so corporate governance is very formal but is are very informed how do we Mar thank you thank you should I answer this question one at a time okay so uh thank you very much Ken for your question um I'll begin by perhaps um highlighting that uh in our economy or in any economy there's what is called a formal sector and an informal sector so amak rodri is in the uh informal sector from what you have uh described for smes um they when you say you're a soul Trader what is that mean you're alone your liabilities is you isn't it but there is a framework under which you are supposed to be operating so there's what is called the business um registration of business names act that's where Soul Traders are sitting and their requirements under there so when we speak about corporate governance you're correct it's for uh corporates and corporates are companies and and other uh bigger organizations the issue here is about the principles of governance so we say corporate governance for smmes because we think that smmes uh can be limited companies starting small with the view of getting bigger so entrepreneurs don't plan to stay as smmes is just your stepping stone and your vision is for growth so there are requirements for a soul Trader you are allowed to be the CEO the accountant and all those things but bear in mind the principles so yes you can be the accountant for your business but you will be the internal control you need help with external audit and you can get a firm you can get a person so it's all about cutting your your cloth according to or what do you say cutting your design whatever according to the cloth that you have you uh cannot plan uh or you you cannot make a big dress from one meter of of material so your question is very good and I think the issue is how do I start as a a soul proprieter knowing that I have a vision to get bigger as we speak I am the CEO I'm also the D nothing wrong with that there's nothing wrong with that but having in mind getting the education that as you grow you will need these structures that's what you we're discussing today I hope I've answered your question thank you thank you Ken next question thinking about their questions please there's a hand at the back sorry please go ahead um good morning um so with regards to corporate governance I think one of the most contentious aspects of the topic is the relationship between the shareholders and the directors and we have the company's act that designates the powers of the directors and the shareholders and then under Zambian law we have judicial decisions that speak to that aspect uh saying that the shareholders have the overriding authority over the directors and that the directors are supposed to dance to the T of the shareholders I think I saw a slide um that talks about the establishment of Cs and responsibilities and with respect to the judicial cases that are mentioned what are the dangers of subjecting the powers of the directors two the powers of the shareholders when the ACT actually says directors can do this and this with respect to the Act and the articles of Association thank you very much I didn't get your name s thank you for your question I think the the case that you're referring to is Kasen versus zimco um it's an old case and it uh has highlighted the agency theory which I've been speaking to and I had mentioned that the agency theory is the older of the two if uh once you you get the slide you will see that the the stakeholder Theory came as a result of what is called the agency problem they now was a problem with that theory um precisely because of what you have said and so when you look at the company's act the Zambian company's act you will find fiduciary duties of the board of directors and one of their duties is to promote the success of the company act in the best interest of the company and so with time there has been a lot of debate around the law that was settled in the Casen matter because of what is happening in the corporate government space where best practice is saying there should be this separation remember I had spoken about stakeholder interests am I going to give you my million dollars to use as you please just because you are a board who I have appointed and can disappoint so the the issue here is about the Dynamics where is the control city with the shareholder isn't it so the shareholder can devolve that power but it can also withdraw it so what is important is for us to recognize our roles just like power absolute power they say corrupts isn't it so governance has taken into consideration those things and there are checks and balances but there's also a recognition of Interest my heart hard earned $1 million should be given to a board to use as they please maybe even outside the Strategic plan and they claim that it's in the best interest of the company what are the options even within Casen what are the options I can change the Articles as a shareholder isn't it because that's my instrument I can with reserve some Powers remember I had said the shareholders reserve some powers to themselves is to address some of those issues this is my money I am vested in this money that's why I'm the one who appoints the board and I'm also the one that disappoints what's important is appreciation of the best practice and I think as you go along you will see that whereas best practice may not be mandatory it maybe the difference between your company getting the much needed investment because shareholders now are very careful is there good governance in this company why would I put my money in an organization that has no financial acument and so you can get away with saying we don't have these systems but the next company will get investment because they have good uh structures and things like that and you won't so I hope I have answered your question uh again it's a very good question thank you please uh lady thank you so much my name is G so my question really is I'd like Clarity on what the benefits of incorporating uh corporate governance especially for for small businesses given the fact that the status quo is okay and then incorporating corporate governance will require extra work and extra resources so what are the benefits especially shortterm ones because for longterm benefits uh they're quite clear because once you grow all these things are necessary but for short benefits for incoporating corporate government thank you thank you good question okay so you you've spoken about short-term benefits then there are medium-term benefits and long-term benefits then there's your vision so your vision is part of the long term isn't it and whatever it is that you're doing even in the short term should relate to your medium term and long term so in the long term you expect to have a big establishment with all these departments and accountants and things like that but you must start from somewhere so you can't wish yourself to the long term you got to do something about it that's why you make shortterm plans so what are your short short-term plans I don't have the money to hire a big firm but I have a little money to to hire one person to look at my books that's what I'll do in the short term and in the medium term maybe I'll better so every business should be founded on transparency all those ethical issues those are governance issues founded like I said you say CEO and founder so what are you doing as a Founder you are making the foundation isn't it and that's how you you you you get to where you want to be in the next five or 10 years whatever the case may be so the benefits are that you will have a business that is accountable that is financially healthy that is transparent a good corporate citizen because you started on a good foundation thank you uh Leia isn't it also true that on to what you said isn't it also true that there could be short and medium-term debt especially for wanting to raise Capital as perhaps investors and financiers would want to see certain the team the controls and so on and so forth since this gives them an added maybe speak to that to get this question yes um I don't think there's anything for me to add to what you have said um resource mobilization when whether you're small or big you need resources isn't it and you need to get those resources from uh an external Source isn't it like this young lady needed resources to go for her school she needed to prove to her parents that she's trustworthy isn't it what is it that you're going to do when you go and get this qualification what's the plan are you going to come back here and just sit around and bake cakes in my house you know so there you you have to be able to demonstrate even at your young stage as an entrepreneur that you can be trusted with this resource and that you will pay it back how do you do that do you just say I'm going to pay you back even this young lady had to demonstrate and as far as the parents were concerned she had demonstrated responsibility because she was selling things and giving the money back to the parents you know that's discipline isn't it she was transparent so she was able to prove her case because she had set a foundation so it's very important uh for you to recognize that what you're doing is not it's not a fantasy even for what you want now you must be able to demonstrate that you can pay back or you can grow the business thank you there was a question my name is and my question is very straightforward how do you differentiate between being a business a business owner and selfemployed and an entrepreneur and at one point at what point can one be recognized or call an entrepreneur okay very good questions from here very mind stimulating So when you say you're a business owner um you are a shareholder in that company when you say you're self-employed who employs it's the business isn't it is it you as a as a shareholder who employs I'm employed by igc I'm not employed by Minister of Finance who is the shareholder of IDC I'm employed by the person who has capacity to employ so your business has employed you that's when you are selfemployed okay what was the other uh issue and at what point can one be identified call themselves and okay um at what point there were there were a lot of shows of hands and I said who is an entrepreneur can I have those hands again now nobody wants to raise their hand you an entrepreneur at what point did you uh realize that you're an entrepreneur are you Innovative are you Innovative yes have you identified gaps in the market or unmet needs yes do you want to make profit do you want to grow your business so you're an entrepreneur as simple as that as straightforward as your question thank you yes good morning uh my name is um you shared a very interesting story concerning your do um I think youve somehow answered the question that I'm about ask when you I think addressing the other questions um we personally have grown up in a in an Environ into let me say culture where mostly parents get to make decisions where children based on maybe their love for the children in terms of wanting maybe better future security and job and all that but in your case it's um it was somehow different in that you saw what your daughter was capable and the things that she was doing then you went forth and supported her with a business even locating maybe like a space um for her to to pursue what she wanted so I wanted to find out cuz you had mentioned I thinking your answer addressing the other question to say you saw what she was doing so like she she built a proper Foundation which allowed you to make that decision but aside from that was there maybe like certain things other things that moved you to to be able to go in that direction aside from just the normal culture that we usually see parents making decisions for their children to say no just stud medicine and these other things thank you so um the other factor that we took into consideration was what I've just been talking to you about the fourth Industrial Revolution the tenets of this revolution is that now there is more focus on Innovation there's more focus on creativity and Agility and so everything is is trying to adapt to these new practices so for example example even with the regulation the way that the regulation is now mostly or generally in Zambia doesn't support the fourth Industrial Revolution because this revolution um Advocates what is called agile regulation creators don't like too many rules isn't it you want to create you don't want to be told oh no you can't come out of here you can't you want to explore but then there is this law so now the laws are in Zambia very slowly changing but you know in other developed countries the laws are such that they encourage creativity and Innovation and so when we identified that in our daughter we thought that we should support it because that's where the world is going and even if we resist existed it it was still going to come back to haunt us I mean we've heard a lot of stories there are some people that have obliged what the parents wanted they go and get a degree they come home and say Here's the degree because you're the one who wanted it can I now pursue what I really want to do so it's it's recognition of the times uh just like parenting has changed even career uh how somebody chooses their career has changed thank you okay the number of hands up so we'll start with the lady yes good morning M and my name is pet so my question is as an entrepreneur you supposed to be a risk taker how much risk is too much for an entrepreneur what of taking okay what business do you do so I'm in the fashion industry I see yes I tell you okay okay so how much risk is too much risk you've got no business huh very little business people are coming in trickling in and then you go and buy a whole Warehouse of materials what's the risk there that your money will be stuck in the materials so you might want to spread your your money maybe use some money for marketing and things like that so uh depending on the risk there's what is called risk identification risk measurement whether you're going to accept a risk whether you're going to to avoid it or mitigate it remember the issue is about taking risks so entrepreneurs will take risks but they must be calculated risks there mustn't there mustn't be too much risk but how do you do this is you go back to your plan remember where do I want to be what do I have how am I going to get there then the excesses will show because you get that warehouse of materials and then you have no money for thread and then you don't have a market because you haven't studied uh the market properly I hope I've answered your question question thank you there was some hands another and the question I have is when you started your presentation you defined corporate governance according to the cut by report now my question is at what point do small medium Enterprises know when to apply the corporate governance principles because one of the requirements is that the CEO of a company should not go on to be chair of the SE so at what point can small medium Enterprise know way to apply that and are there any requirements or penalties for not following corporate governance principles thank you thank you I'll start with the last part of your question where you said are there any penalties remember I had spoken about mandatory regulation isn't it the one in the law you contravene the law there is censure but then there's also self-regulation so it really depends then there's voluntary regulation so you don't get penalized by the people who made the king's code for not following their code but you might have uh your own internal uh processes so when you speak about um the CEO not being a chair of the board that could be in relation to corporate governance best practice isn't it what does it mean when you say best practice it's not mandatory but for you to achieve success the people who have made this code think that you should govern yourselves in this way so it's best practice that you have a separation but it doesn't mean that you you you cannot have a CEO who is also the chair they are what are called executive chairpersons of boards what does that mean means that person is also involved in the daytoday operations because he's an executive so it really depends in America that is very common where the CEO is also the chairperson of the board and you know they've done business and nothing has broken so it really just depends on what reg what is your regulatory framework thank you next question so I think that would just for for time purposes we we'll take that as the as the last question yeah keep our thank you very much thank you [Applause]