The document summarizes a real estate seminar that was held on March 2nd, 2018 at the Holiday Inn. It provides details about the presenter, Mr. Edward Siwela, and his qualifications. The topic of the presentation was on the importance and adoption of good corporate governance in the real estate industry. The presentation structure, lesson objectives, and seminar theme are outlined. It also discusses concepts like leadership, the current global and local environment, attributes of effective leadership, corporate governance issues in real estate, and steps to achieve sustained business success through good governance practices.

1. Real Estate Continuous
Professional Development Seminar
Held at the Holiday Inn on 2 March 2018

2. About the Presenter
 Mr Edward Siwela, MBA, BSc Hon. Polad (UZ)
 Immediate past Executive Director, IoDZ
 Chairperson, Sports and Recreation Commission
 Treasurer and Member of the EXCO of African Corporate
Governance Network (ACGN)
 A Trustee of Zim. Code
 A Global Corporate Governance Forum Certified trainer

3. Topic
‘Understanding the importance, relevance and
adoption of good corporate governance in the
Real Estate practice.’

4. Presentation structure
 Corporate governance and its importance to RE
 Role and responsibilities of the REIZ Board

5. Lesson objectives
At the end of the presentation participants will be:
 Able to define corporate governance
 Able to demonstrate an understanding of concepts and
practice of good corporate governance
 Able to identify principles, structures of good corporate
governance in the real estate industry

6. Seminar theme
 “Good corporate governance and continuous
professional development- the unbreakable nexus in
professional real estate.”

7. ‘A positive future is not a spectator’s future, it is a
participant’s future’
Prof Philip Spies
 The challenge to practitioners in Zimbabwe’s Real
Estate Industry is to become participants in shaping
an attractive and assured future of real estate,
rather than be passive spectators
Creating the future

8. Governance is about leadership
We learn from the King Committee of South Africa
that:
“Good corporate governance is essentially about
effective, responsible leadership. Responsible
leadership is characterised by ethical values of
responsibility, accountability, fairness and
transparency”
[King III, 2009]

9. “…leadership is about inspiring people to do their
best through a shared vision, which ideally involves a
process of mutual influence…”
[John Knights in Tony Wall & John Knights-ed.
2013]
What, if I may ask is the vision of Zimbabwe’s Real
Estate Industry?
Leadership defined

10. State of global and local environment
 Today’s environment is in a state of flux
 It is characterised by unprecedented changes;
 Volatility
 Uncertainty
 Complexity; and
 Ambiguity
 This is the context within which Real Estate
leadership should be considered

11. The New Normal- It’s a VUCA World
VOLATILITY
Rate of Change
COMPLEXITY
Multiple Key decision Factors
UNCERTAINTY
Unclear about the present
AMBIGUITY
Lack of clarity about
meaning of an event

12. Implications for corporate leadership
 More is demanded of today’s and future corporate
leaders
 Today’s and future leader should be able to cope
with the VUCA world noted above.
 Fresh leadership attributes and skills are called for
 Gone are the days when only experience and track
record counted in identifying and recruiting leaders

13. Research findings- essential attributes
 Jeffrey Cohn and J P Flaum came up with five
conclusions on today’s executive search, that:
 Experience is overrated;
 Team-building skills are paramount;
 Urgency outranks empathy;
 Resilience is a must- ‘an important leadership virtue’
 Authenticity or candor is also key- ‘a willingness to
deliver bad news quickly and honestly’
Source: Harvard Business Review, June 2016

14. Team-building skills
 A candidate’s ability to assemble and manage a
high-performing team ranked highest in the study
 Successful leaders in the VUCA world should be
‘player-coaches’- work with their teams
 Today’s and future leaders should avoid using “I”
too often when referring to accomplishments
 There is no ‘I’ in a team

15. Authenticity or candor- key
 Today’s and future leaders need the confidence to
be transparent with their members about their teams
and anything bad that is happening in business.
 It is an important quality of a leader in a VUCA
world or environment to be upfront with key
stakeholders

16. 16
Questions

17. Current corporate governance
issues in the real estate industry
 Standardized property valuation
 A distinct lack of transparency
 Executive compensation
 Board selection, composition and qualification
 Board evaluation
 Investor relations
 The big opportunity presented by good corporate
governance

18. Current corporate governance
issues in the real estate industry
 Board independence
 Director accountability
 Board evaluation
 Investor relations
 Greater voice to shareholders over critical
boardroom decisions
 The big opportunity presented by good corporate
governance
(Source: Prof. Karl – Werner Schulte)

19. Key stakeholders
 Investors
 Providers of corporate finance
 Occupiers of properties
 Developers
 Regulators and government

20. Importance of corporate
governance in real estate practice
 Real estate is a global business
 Good corporate governance becomes an
important issue for international investors and
other stakeholders identified above

21. ‘Governance is a game – changer’
 “When governance is effective it brings a host of advantages”
 It protects and upholds the best interest of an entity
 It guaranties a return to stakeholders
 It ensures accountability by those in leadership positions- board and
management, alike
 It incentivizes increases access to corporate finance
 It is a game-changer [Carl Bates, 2014]

22. Code of corporate governance
 Prof. Schulte found that in Germany:
 To improve corporate governance in real estate
practice, Real Estate Association adapted the
National Code of Corporate Governance and
developed the real estate industry code.

23. Code of corporate governance
 Prof. Schulte found that in Germany:
 To improve corporate governance in real estate
practice, Real Estate Association adapted the
National Code of Corporate Governance and
developed the real estate industry code.
 Code referred to as ‘Principles of proper and
honourable management in the real estate
industry.’ (“The Ten Commandments”)

24. The Ten Commandments
1. Corporate management operates real estate
business in the interest of Shareholders
2. Professionalism, transparency and fairness
towards stakeholders
3. Suitability and sufficient experience in
management backed by cpd
4. Expertise in governance structures
5. Suitable valuation of real estate assets

25. The Ten Commandments
6. Effective internal controls and risk management
7. Effective prevention and management of conflict
of interest
8. Imperative of external auditing of accounts
9. The business model of a real estate enterprise
should be clearly set forth and changes explained
10. Information policy should be underpinned by
principles of trustworthiness and equal treatment

26. 26
Questions

27. Sustained business success
 The Zimbabwe’s Real Estate needs to embrace
principles and best practices of good corporate
governance by developing fundamental building
blocks for successful governance and sustained
business success, namely:
 Having clear and well-defined strategic plans- a board function;
 Having business models/ business value propositions- “formal,
written statements of how they create, deliver and capture
value….” [Carl Bates, 2014]
 Having reliable financial management and reporting;
 Having sufficient human and financial resources;

28. Sustained business success
 Boards need to develop fundamental building
blocks for successful governance and sustained
business success, namely:
 Performance management of the Board, CEOs and throughout;
 Well defined (formal) shareholder/stakeholder expectations; and
 High level knowledge of and awareness on what governance
involves;
 Have a clear programmes to develop the above

29. Board appointment- what it means
 Being appointed a director brings with it
responsibilities such as:
 “To govern a business in a way that sustainably grows
and develops the business”;
 ‘ensuring that the business delivers shareholders
(members) and stakeholders returns;
Source: Carl Bates, 2014

30. Board appointment- what it means
 With being appointed a director comes legal
requirements such as:
 “To understand and carry out a director’s legal duties;
 To acquire, possess and apply knowledge and skill in
governing business
 It requires developing an understanding of governance and
its application to business
source: Carl Bates, 2014

31. Being appointed a director- what it
means
 Requires orientation and training for the new job
 Requires a different perspective and set of skills
 It calls for embracing the role of the board, a new
identity and change of behaviour-[Benedict Lim]

32. Role of the board
 The over-arching role of the board is “to ensure the
company’s (institute’s) continuing prosperity.” – John
Harper (2010)
 He observes that “everything it does should be conducted
with this purpose in mind, requiring a generally forward-
looking, long-term perspective.”

33. Role of the board: NCCG 2014
 “The board of directors should provide effective corporate
and entrepreneurial leadership.”
 Board leadership must be based on:
 Ethics, professionalism & good morality;
 Strategy, risk, performance & sustainability are
inseparable;
 Prudent and effective controls that address risks
 Promotion of best interest of the company &
stakeholders

34. Questions

35. Oversight of Managerial Performance
 Developing key performance indicators is necessary, but
not sufficient
 Additional measures are required:
 Annual appraisal of management

36. Accounting to Members
 To the REIZ members.
 To Regulators in respect of compliance with the law-
ZIMRA, NSSA
 For the performance of the real estate entities- operational
and financial performance
 For contribution in respect of the environment and social
corporate responsibility
 For the board’s decisions and actions

37. 37
Questions

38. Legal duties of board members
 Board members have onerous duties.
 A board member is required to act with honest, competence
and conscientiousness.
 A board member’s duties arise from the fact that he or she
is a fiduciary for members.
 A fiduciary exercises power or holds assets on behalf of
others - members.
 The law imposes duties to protect the institute and
members

39. Director’s Legal Duties
 Common Law Duties:
 Duty to act within the powers
 Duty of care
 Fiduciary duties
 Duty of loyalty

40. Questions
40

41. Join the IoDZ

42. Unleashing the power
of the private sector
THANK
YOU
Institute of Directors Zimbabwe

43. Current business ethical issues
Discrimination corruption
Fraud Money laundering
Tax evasion Conflict of interest
Related party transactions Dishonesty
Executive remuneration Infringement of labour rights
Source: Dando and Raven, 2006