An Analysis of Corporate Governance

AN ANALYSIS OF CORPORATE GOVERNANCE IN THE ZAMBIA REVENUE AUTHORITY (ZRA)

INTRODUCTION

Definition of Corporate Governance

Corporate governance refers to the processes, customs, policies, laws and institutions affecting the way a corporation (or organisation) is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. In contemporary business corporations, the main external stakeholder groups are shareholders, debtholders, trade creditors, suppliers, customers and communities affected by the corporations activities. Internal stakeholders are the board of directors, executives, and other employees.

Corporate governance is a multi-faceted subject. An important theme of corporate governance is the nature and extent of accountability of particular individuals in the organization, and mechanisms that try to reduce or eliminate the principal-agent problem.

A Brief History of the Zambia Revenue Authority

The Zambia Revenue Authority was formed on 1st April 1994 as a corporate body under the Zambia Revenue Authority Act No. 23 of 1993 of the Laws of the Republic of Zambia. Pursuant to the act, the ZRA is charged with the responsibility of collecting revenue on behalf of the Government of Zambia under the supervision of the Minister of Finance and National Planning.

Organisational Structure , Nature of the business and Separation of Control

The Zambia Revenue Authority is not a corporation in the usual sense of the word, but is an institution of the Government that has a mandate to operate by law and therefore, the main point of reference in regards to how the institution is governed is the law that was enacted to bring it into existence. That said, the operational side of achieving that mandate still patterns after the usual and expected arrangement of having directors as agents of the “owners” who in this case are not shareholders that...