A critical analysis of Zimbabwe’s codified business judgment rule and its place in the corporate governance landscape

The business judgment rule (BJR or the Rule) is an American legal export which has become a key corporate governance tool in most leading common law jurisdictions, such as, Australia, Canada and South Africa. However, the Rule has not been formally embraced in the United Kingdom. In Zimbabwe, the Rule has traditionally been treated as a common law feature. However, section 54 of Zimbabwe’s new Companies and Other Business Entities Act re presents one of the significant advances in strengthening the jurisdiction’s corporate governance principles by codifying the R ule. The BJR originated together with the directors’ duty of care and skill. There are two main formulations of the BJR. The first one is by the Delaware Chancery Court and the second one derives from the American Law Institute’s Principles of Corporate Governance. The Rule mostly applies in determining the procedural aspects of the directors’ decision or the decision -making process and only in exceptional cases is it invoked to review the merits of their decision. This article seeks to critically analyse the major elements of Zimbabwe’s codified BJR and to ascertain its place in the corporate governance framework. As will become clear, it will also be argued that the statutory BJR is intended for the enhancement of directorial accountability.


INTRODUCTION
It is trite that the business judgment rule (BJR or the Rule) was originally developed as a common law principle 1 by American judges of the State of Delaware . 2 Corporate law scholars are unanimous that the Rule is an American legal export. 3 The BJR originated together with the directors' duty of care and skill. 4 Cassim et al point out that the rule is a "cornerstone of corporate law in the [United States of America (USA)] that was adopted in Australia [and] Hong Kong but rejected in the United Kingdom 5 and New asserts that the BJR is a "legal defence for directors challenged with exercising their duties of care and skill". 16 As a jurisdiction that has codified a legal transplant, it is imperative that judges, legal academics and practitioners are well informed of the relevant model of the BJR which is compatible with local constitutional imperatives and that best resonates with the legislative intent to strengthen Zimbabwe's corporate governance regime. 17 This article seeks to critically analyse the major elements of Zimbabwe's codified BJR and to ascertain its place in that jurisdiction's corporate governance framework. As will become clear, it will also be argued that the statutory BJR is intended for the enhancement of directorial accountability in Zimbabwe. This conclusion is reached after a reflective consideration of overarching factors ranging from constitutional imperatives to economic justifications. The article proceeds as follows: immediately after this Introduction there follows a brief synopsis of the concept of corporate governance. Thereafter, an assessment of the place and importance of the BJR follows. A critical examination of the Zimbabwean BJR is then undertaken before the article concludes.

BRIEF SYNOPSIS OF THE CONCEPT OF CORPORATE GOVERNANCE
Corporate governance is an elusive concept. 18 However, it can be described as "the system by which an entity is directed and controlled with a view to ensuring the achievement of its objectives in a sustainable manner within an environment of accountability to its stakeholders". 19 The preamble to the Organisation for Economic Cooperation and Development (OECD) Principles of Corporate Governance states that "corporate governance involves a set of relationships between a company's management, its board, its shareholders and other stakeholders". 20 The King IV Report on Corporate Governance for South Africa, 2016. The Institute of Directors in Southern Africa (King IV) defines the concept as "the exercise of ethical and effective leadership by the governing body towards the achievement of … ethical culture, good performance, effective control and legitimacy". 21 16 See Schoeman (2013) at 11. 17 Section 9(1) of the Constitution of Zimbabwe 2013. 18 McLaughlin S Unlocking company law 2 nd ed Oxford: Routledge (2013) at 5; Wiese T Corporate governance in South Africa with international comparisons 2 nd ed Claremont: Juta and Company Limited (2016) at 2-3. 19 See Davis et al (2013) at 171. See also the discussion by Larcker D & Tayan B Corporate governance matters: a closer look at organizational choices and their consequences 2 ed New Jersey: Pearson Education (2016) at 7-8. 20 Preamble The OECD Principles of Corporate Governance 2004 at 11. 21 At 11.
In the words of Cassim et al, corporate governance "is concerned with the structures and processes associated with management, decision-making and control in [incorporated legal entities]". 22 One of the most commonly cited definitions 23 of corporate governance is derived from the Cadbury Report 24 wherein it was described as "the system by which companies are directed and controlled". 25 However, although various academics, commentators and organisations have formulated their "own" definitions of corporate governance, it is an undeniable fact that the underlying common denominator is the exercise of decision-making power by a legitimate leadership structure within a company, usually the board of directors, for the achievement of set objectives.
Before 2014, the principles of Zimbabwe's hybrid corporate governance regime could be gleaned from the old Companies Act, 26 the Public Finance Management Act 27 and the Zimbabwe Stock Exchange Listing Requirements. 28 To a certain extent, the rules of some professional bodies, such as the Institute of Corporate Directors of Zimbabwe, also influenced corporate governance in Zimbabwe. 29 However, in 2014 Zimbabwe introduced the National Code on Corporate Governance (the Code) which consolidated it's country-specific corporate governance principles in a single document. 30 In an effort to create and place legislative force behind the requirements and standards of corporate governance, the Code was inserted as the First Schedule to the Public Entities Corporate Governance Act. 31 With the old Companies Act 32 being more than six decades old, albeit with some amendments along the way, the Code became Zimbabwe's overarching source of contemporary corporate governance principles for both public and private companies. 33 22 See Cassim et al (2012) at 472. 23 See Cassim et al (2012)  Clearly, the drafters of the Code were animated by the intention to address the corporate failures that had plagued Zimbabwe. 34 For example, the Code provides that minority shareholders' interests should be respected and that the shareholders, the board and the management of a company must promote and protect the interests of the company and its stakeholders. 35 Accordingly, it is submitted that the Code has advanced corporate governance in Zimbabwe by introducing a stakeholder or pluralistic approach contrary to the common law which was shareholder centred. 36 Like its peers in the Commonwealth, the old Companies Act 37 contained no explicit statement on directors' duties. On the other hand, the COBE Act in section 195 (5), amongst others, imposes a duty on company directors to have regard for the interests of employees, the community, the environment, customers, suppliers and the long-term consequences of any decision. Accordingly, the Act has made a credible attempt to entrench the stakeholder inclusivity approach to corporate governance in Zimbabwe.

THE PLACE AND IMPORTANCE OF A BJR
As has been alluded to above, the BJR is usually invoked in the context of a directorial decision-making exercise. This makes it a pertinent aspect of any jurisdiction's corporate governance framework. The BJR serves various corporate governance purposes. It can be properly applied as an effective tool to thwart frivolous litigation. Bainbridge argues that the rule is the panacea for the universal tension between directorial authority and accountability. 38 It has been argued that the BJR exists because of information asymmetry. 39 Directors are presumed to possess better knowledge of the day-to-day operations of the company and to possess superior experience of the economic and business world relative to judges. 40  Bainbridge adds that the Rule exists to protect directors and to encourage them to fully exercise their powers. 42 It is the responsibility of directors to manage the affairs of their companies. 43 In similar fashion to other contemporary company law statutes, section 218(1) of the COBE Act explicitly confers this function upon directors. 44 In practice, the BJR defines the roles of directors and shareholders by enforcing the principle that decision-making is the directors' prerogative. 45 Centralised decisionmaking is key to a sound system of corporate governance. 46 The rule ensures that the decision-making power is reserved for directors and "prevents the judiciary from meddling in managerial decisions". 47 In addition, McMillan points out that the BJR seeks to protect directors who act in good faith even though their decisions might ex post facto prove to be illogical. 48 Mongalo asserts that the purpose of the rule is to prevent courts 41 See Giraldo (2006)  from second-guessing directors' decisions. 49 Cassim FHI et al opine that the Rule was created "to protect directors from hindsight bias". 50 Given the nature of the role they must play within the corporate structure, it is indeed important to protect directors from the risk of hindsight bias. 51 Similarly, but in more general terms, Havenga submits that the Rule is there "to protect honest directors". 52 It is also argued that the Rule has something to do with "respecting shareholders' will". 53 In other words, there is a need to prevent shareholders from becoming managers of their company. 54 Also, directors' decisions need to be respected due to the principle of bounded rationality. 55 Furthermore, "[a]ll humans have inherently limited memories, computational skills, and other mental tools …". 56 Human fallibility, therefore, forms one of the core values underlying the BJR. 57 Additionally, there is a need to avoid "the risk of stifling innovation and venturesome business activity". 58 Risktaking is an indispensable ingredient in wealth creation which is central to the mission of every company. 59

Section 54 of the COBE Act provides :
"(1) Every manager of a private business corporation and every director or officer of a company has a duty to perform as such in good faith, in the best interests of the registered business entity, and with the care, skill, and attention that a diligent business person would exercise in the same circumstances.
(2) In performing that duty, the manager, officer or director as the case may be referred to in subsection (1) may rely on information, opinions, reports or statements (including financial statements) of independent auditors or legal practitioners or of experts or employees of the registered business entity whom [sic] the person reasonably believes are reliable and competent to issue such information, opinions, reports or statements. (

3) Subsection (2) applies only if the person makes proper inquiry where the need for inquiry is indicated by the circumstances, and has no knowledge that such reliance is unwarranted. (4) A person who makes a business judgment acting as stated in subsection (1), (2) and (3) fulfils the duty under this section with respect to that judgment if that person-(a) does not have a personal interest as defined in section 56 in the subject of the judgment; and
(b) is fully informed on the subject to the extent appropriate under the circumstances; and (c) honestly believes when the judgment is made that it is in the best interests of the company or corporation. (5) No provision, whether contained in a company's articles or a private business corporation's by-laws or otherwise, shall relieve a director or member from the duty to act in accordance with this Part or relieve him or her from any liability incurred as a result of any breach of such duty".
As can be seen above, in terms of section 54(4) of the COBE Act, 60 there are four elements of the BJR that must be complied with before a director can enjoy the protection of the Rule. Before an examination of the current regime, it is pertinent to reflect on Zimbabwe's position before the COBE Act. There was no provision for a statutory BJR in the old Companies Act. 61 However, as can be seen in case law, both a BJR which was usually invoked in instances of allegations of directorial oppressive conduct and derivative litigation existed under the common law. Zimbabwe's common law BJR manifested mostly as an abstention doctrine. 62 In Stalap Investments (Pvt) Ltd v Willoughby's Investments (Pvt) Ltd 63 it was held that at common law, the courts would not generally interfere with the domestic affairs of a company on account of a disgruntled shareholder. 64 Some of the exceptional instances that warranted judicial intervention at common law include occasions where there was a deadlock in the affairs of the company or where a resolution or proposed resolution or act by the directors was illegal or unconstitutional or constituted a fraud on the minority. 65 In Matanda v CMC Packaging (Pvt) Ltd 66 it was emphasised that "before a member invites the Court to interfere in the internal arrangement of a private company that member must … [remember that it] is not part of the business of a Court of Justice to determine the wisdom of a course adopted by a company in the management of its own affairs". 67 In Zvandasara v Saungweme & others 68 Makoni J reiterated that the courts should not be quick to usurp managerial responsibilities. 69 Whilst quoting Dowling J in Yende v Orlando Coal Distributors (Pty) Ltd 70 Makoni J further held that "in general, the policy of the courts has been not to interfere in the internal domestic affairs of a company, where the company ought to be able to adjust its affairs itself by appropriate resolutions of a majority of shareholders". 71 However, it is submitted that a wholesale adoption of the BJR in the form of an abstention doctrine may produce the unintended consequence of denial of justice to well-meaning applicants. 72 The said doctrine effectively short-circuits the litigation proceedings by preventing the courts from reviewing the merits of decisions made by boards of directors. 73

4.1
What constitutes a business judgment?
The first element of Zimbabwe's BJR as manifest in the COBE Act is that a director or officer must consciously 74 make a business judgment. 75 This implies positive conduct 76 on the part of the decision-maker which involves the board's commitment to properly evaluate the risks involved. 77 Australia is currently the only leading jurisdiction that has managed to provide a statutory definition of the concept of business judgment. 78 Failure to act is not covered by the BJR because it is regarded as an omission 79 , but a decision not to act falls within the ambit of the rule. 80 Automatic or mere approval of a decision, especially when it comes from a controlling shareholder, without proper consideration does not suffice. 81 72 See Rosenberg (2009)

The requirement of a material personal interest
The decision-maker must not have a personal interest in the subject matter of the judgment 82 as defined in section 56(1)(a) of the COBE Act. 83 Although this section does not unequivocally provide for directorial independence, it is submitted that by virtue of section 195(4) of the COBE Act, 84 directors are obliged to be independent always. Fears that section 54 of the COBE Act may be vulnerable to abuse since it does not require the interest to be of a "material" nature are allayed by the reference to section 56(1)(a) which incorporates this element. However, since section 56 specifically applies to material personal interest of a direct nature, it is submitted that directors' indirect interest in the subject matter of their decision-making is not prohibited. 85 This legislative oversight may be exploited by directors who, though they may not "appear on both sides of a transaction", may connive with their associates or relatives. 86 A consideration of the approach followed in other common law jurisdictions may be helpful. Under South African law, a director or her/his related persons must not have a direct pecuniary interest in the impugned transaction. 87 Although the United Kingdom (UK) rejected a formal BJR, it adopted what one company law commentator has described as "a soft business judgment rule". 88 This informal or "soft" BJR contains an inherent inescapable review mechanism that allows for partial judicial interference with directors' decision making prerogative. 89 In the UK, "a director must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company". 90 Even though the UK legislature preferred the phrase "connected persons", 91 it is submitted that the UK 82 Section 54(4)(a) of the COBE. 83 Section 56(1)(a) of the COBE provides that "in this section 'personal financial interest', when used with respect to any person means a direct material interest of that person, of a financial, monetary or economic nature, or to which a monetary value may be attributed". 84 This section provides that "[e]ach or every director (as the case may be) shall exercise independent judgment...".
85 Indirect interest may be manifest when a person associated with or related to the decision-maker is interested in the outcome. 86 Zimbabwe may draw some lessons from South Africa. Although the statute in South Africa does not explicitly prohibit directors who are indirectly interested, s 76(4)(a)(ii)(aa) of the Companies Act 71 of 2008 addresses this problem by requiring that the director should have had "no reasonable basis to know that any related person had a personal financial interest in the matter". position is akin to the equivalent South African statutory prescription since the director's family members 92 or legal entity with which s/he is connected 93 are regarded as interested parties. In this respect, it is submitted that section 54 of the COBE Act is vulnerable to abuse.
Traditionally, the plaintiff bears the burden of proving that the defendant had a material personal interest in the transactions and that s/he was not independent. 94 This is a necessary presumption which encourages the exercise of directorial authority through venturesome risk taking and maintains the internal group dynamics within the board of directors. 95 It is submitted that section 54(4) is couched as a presumption to the effect that if a director satisfies the requirements of section 54(4)(a)-(c) s/he will be presumed to have fulfilled the "duty under this section" which includes directorial financial disinterestedness. As such it is argued that the Zimbabwean legislature commendably followed the traditional approach that plaintiffs have the onus to prove the defendant's personal interest in the impugned transaction. 96

What does an informed decision consist of?
A director must make an informed decision on the subject to the extent appropriate under the circumstances. 97 In performing that duty, the decision-maker "may rely on information, opinions, reports or statements of independent auditors or legal practitioners or of experts or employees" appointed by the company. 98 However, a director or officer must reasonably believe that such people are reliable and competent to issue such information, opinions, reports or statements in order to enjoy protection under the BJR. 99 Clearly, the reference to 'reasonable belief' implies an objective standard. 100 As such, a director satisfies this requirement if a reasonable person placed 92 Section 253 (2)   in his position would have made the same decision as her/him. 101 Further, a director should make a proper inquiry where the need for inquiry is suggested by the circumstances and s/he had no knowledge that such reliance is unwarranted. 102 The term "proper inquiry" is not defined in the COBE Act. It is hoped that this would be treated on a case by case basis as circumstances present.
It is one thing to make a decision but it is another to make an informed decision. 103 The latter implies that one commits herself to diligently seek out relevant information before making a decision. 104 It is this type of conduct with which the rule is concerned. Generally, this requirement does not imply that the board must be reasonably informed of every fact. 105 It is submitted that the COBE Act is defective in this regard as it specifically requires directors to be "fully informed". In South Africa, a director must be reasonably informed about the matter. 106 Some of the factors considered by the courts in determining whether directors were reasonably informed before they made a decision include the quality of the decision, whether the directors had enough time to acquire information about the impugned decision, and the advice considered by the directors. 107 It is submitted that the Zimbabwean legislature set a very lofty standard which may be impossible to meet in practice. Such a restrictive provision is not good law as it may discourage competent people from taking the office of a director, or incumbent directors may be reluctant to engage in a risk-taking enterprise. 108 Further, unlike the South African provision on the same subject, it is not clear whether the requirement of a decision-maker being "fully informed" requires a subjective or an objective standard. 109 An objective standard "is based on conduct and perceptions external to a particular person". 110 A subjective standard is "peculiar to a particular person and based on the 101 See Mupangavanhu (2019)  person's individual views and experiences". 111 It considers a person's mental state at the time the conduct or transaction in question took place. In practice, an objective standard is a test for reasonableness. 112 In ASIC v Rich, 113 Australia's Supreme Court of New South Wales accepted the applicant's argument that the Court should adopt an objective approach when considering the information required for decision-making . 114 An objective standard may take different forms ranging from a rather relaxed Australian approach to a much stricter Delaware approach which requires an incorporation of the concepts of gross negligence when determining reasonableness. 115 It is submitted that the Australian objective standard is preferable when determining the objectivity of a decision-maker's decision. The board should only consider material facts that are reasonably available. 116

The requirement of an honest belief that a decision is in the best interests of the company
Finally, a director or officer, when making the business judgment, must honestly believe that the decision made is in the best interests of the company. 117 There are two aspects to this , namely: the decision-maker must have an honest belief and the decision itself must be in the best interests of the company. An honest belief relates to what the decision-maker accepted in his mind to be the company's best interests. 118 It calls for a subjective test. 119 On the other hand, a rational belief, which is what is required in South Africa, refers to reasonable grounds for decision-making. 120 Eventually, this translates into an objective test. 121 The meaning of "the best interests of the company" depends on the definition of "the company". An understanding of what constitutes the "company" for present purposes requires knowledge of whether the jurisdiction concerned adopts the shareholder primacy approach, the enlightened shareholder value (ESV) approach or the pluralist or stakeholder approach. 122 The shareholder primacy approach is founded on the traditional view that "the company" means the shareholders as a collective and therefore the company's best interests must necessarily translate to the shareholders' best interests. 123 This traditional view practically equates or replaces "the company" with shareholders. 124 Esser asserts that the ESV approach dictates that "the primary role of the directors should be to promote the success of the company for the benefit of the shareholders". 125 According to the stakeholder/pluralist theory, shareholders are just one group among the many stakeholder constituencies whose interests need to be considered in company decision-making. 126 The pluralist approach allows directors to consider all stakeholders' interests by placing them on the same footing. 127 It is argued that this approach is in sync with the contemporary needs of corporate governance. 128 It also takes into consideration both short term and long term goals of a company. 129 It is submitted that the COBE Act adopted a pluralist approach. 130 Section 195(5) thereof provides that for the purpose of subsection (4), 131 every director shall have regard , inter alia, to "the long-term consequences of any decision; the interests of the company's employees; the need to foster the company's relationships with suppliers, 127 See Ramnath & Nmehielle (2013) at 106-107. 128 King IV Report at 24-26. 129 See Ramnath & Nmehielle (2013) at 106-107. 130 Further support for this position is to be found in the Code which was inserted as the First Schedule to the Public Entities Corporate Governance Act 4 of 2018. The Code inter alia states that directors should adopt an inclusive stakeholder approach to corporate governance.
customers and others; the impact of the company's operations on the community and the environment; the desirability of the company maintaining a reputation for high standard of business conduct; the need to act fairly as between shareholders of the company".
Section 195(5) of the COBE Act obliges directors to have regard to, inter alia, the interests of customers, employees, suppliers and customers. This perfectly resonates with the basic tenets of the pluralist theory highlighted above.
The argument advanced here that directors' decision-making should be informed by a consideration of all stakeholders' interests is reinforced by some of the principles contained in the Code. This Code is Zimbabwe's leading corporate governance soft law instrument. 132 It is directly aligned with the spirit of the Constitution of the Republic of Zimbabwe, 2013 (Constitution). 133 Also, the Constitution created a mandatory rule for the adoption and implementation of policies and legislation "to develop efficiency, competence, accountability, transparency, personal integrity in all institutions…". 134 Some of the key problems that the Code sought to address are "owner management of businesses" and "corporate power concentration" which undermine directorial accountability and lead to the violation of minority shareholders' and other stakeholders' rights. 135 The Code also sought to be an elixir for opaque decision-making processes. 136 The principles enshrined in the Code apply to both public and private entities. 137 To this end, the Code provides that directors must be accountable to all stakeholders whom they should treat equally 138 in addition to adopting an inclusive stakeholder approach to governance. 139

Enhanced directorial accountability
It is submitted that another important aspect of the new Zimbabwean BJR is section 197(2)(a)(i) of the COBE Act which provides that "[a] director of a company may be held liable … [for] breach by the director of a duty contemplated in section 54" which enshrines both the duty of care and the BJR. 140 This is a vital provision which seeks to create directorial awareness of the threat of incurring personal liability in the event of their failure to make proper business judgments. It is further submitted that this provision is aimed at embedding directorial accountability into Zimbabwe's BJR. This legislative attempt to bolster directorial accountability is justifiable on a number of premises.
First, regard will be had to constitutional imperatives. The Constitution is "the supreme law of Zimbabwe and any law, practice, custom or conduct inconsistent with it is invalid to the extent of the inconsistency". 141 The obligations imposed by the Constitution are binding on every legal person, including companies, and must be fulfilled by them. 142 One of the purposes of the Constitution is to foster the spirit of accountability. 143 Boards of directors must always comply with the Declaration of Rights contained in the Constitution and adhere to pertinent codes and best practice standards. 144 Section 331 of the Constitution , which provides for general principles of interpretation of the Constitution, states that when seeking to interpret the constitutional provisions, reference must be made to section 46. According to section 46(2) of the Constitution, "[w]hen interpreting an enactment, and when developing the common law … every court, tribunal, forum or body must promote and be guided by the spirit and objectives of this Chapter". Among the founding values and principles is the principle of good governance which, inter alia, includes concepts, such as, justice and accountability. 145 Furthermore, the Constitution implores the State to "adopt and implement policies and legislation to develop efficiency [and] accountability … in all institutions…". 146 Therefore, just as with South Africa, it is also submitted that the Zimbabwean Constitution has "changed the context of all legal thought and decisionmaking" 147 as the COBE Act's provisions have to be interpreted and applied through the prism of the constitutional values including accountability. 148 Secondly, the enhancement of directorial accountability is justifiable on economic grounds. A consideration of the underlying reasons behind the global corporate debacles to which Zimbabwe was not an exception, further buttresses the argument for 140 Section 197(2)(a)(i) of the COBE Act. the adoption of an accountability enhancing BJR in the Sub-Saharan African State.
Whilst the courts' hesitancy to replace directors' business judgment with theirs may be understandable, 149 such a stance may also effectively mean that "a valid claim remains [unaddressed]". 150 An indiscriminate application of the abstention doctrine 151 that is merely based on the justification that directors are more knowledgeable than the courts potentially makes the BJR vulnerable to abuse by ill-willed directors. An experienced and influential director may deceitfully commit prohibited acts knowing that the courts will exercise deference 152 to her/his decision unless the plaintiff successfully rebuts the pro-director presumption.
While it is appreciated that a myriad of factors led to the 2008 Global Financial Crisis (GFC), it cannot be denied that the "mishandling of risk" was the most prominent one. 153 The GFC related disaster left more questions than answers; one of those questions is: whether, in light of the global director misfeasance revealed by the GFC, the principle of director liability should be revisited? Against the backdrop of the GFC 154 and other modern corporate debacles, 155  the form of the abstention doctrine, as evident from the cases discussed above, is unsustainable. Furthermore, there is a risk that if the abstention doctrine is followed, the BJR may ultimately become useful only as a mere determinant of which party bears the evidentiary burden of proof. 156 Finally, it is submitted that an examination of some of the objectives of the COBE Act, as revealed in the Memorandum to the Companies and Other Business Entities Bill (Memorandum), 157 suggests legislative preference for a BJR that upholds and strengthens the principle of accountability. In this regard it is noteworthy that the COBE Act sought to provide additional measures to protect shareholders and investors, especially minority shareholders and investors. 158 Minority shareholder interests cannot be effectively protected if the courts are arbitrarily precluded from interfering with directors' decisions whenever the plaintiff fails to rebut the presumption or satisfy the burden of proof as envisaged by the abstention doctrine. 159 It is submitted that fostering directorial accountability protects shareholders and investors, especially minority shareholders by allowing the courts to determine whether a decision-maker complied with her/his duty of care and to assign liability to the offender where appropriate.
This also acts as a deterrent to future would-be miscreant directors, which further safeguards shareholder interests and boosts investor confidence 160 without arbitrarily undermining entrepreneurial risk taking by directors. 161 Eventually, this fulfils other vital purposes of the new Act, namely, encouraging good corporate governance and combatting the use of the company form for criminal purposes. 162 It is submitted that, in this way, the BJR becomes an effective corporate governance tool that balances directorial authority through the presumption of good faith, and directorial accountability through the real threat of personal liability. 156 This is nothing more than a repetition of the general rule that when the plaintiff fails to prove a prima facie case the defendant will be entitled to summary judgment. However, it can be argued that the allocation of the burden of proof is just a consequence of the BJR's operation and should not be regarded as its main purpose. See Ponta (2015) at 34. 157 [HB 8 2018]. 158 Memorandum. 159 It is submitted that in its quest to enhance directorial accountability, Zimbabwean courts should adopt a BJR in the form of a standard of liability. According to this form or manifestation of the BJR, the Rule will not apply if the decision-maker violated her/his duty of care. 159 Such a standard of liability dictates how one should conduct herself or how one is expected to play an assigned role. See Yaru (2016)

CONCLUSION
A functional BJR is one of the chief cornerstones of a progressive corporate governance regime. The deliberate incorporation of the concept of directorial accountability into Zimbabwe's statutory BJR is a welcome development towards entrenching good corporate governance. The relevant constitutional imperatives and self-regulatory principles examined above are further foundational premises for an effective corporate governance regime. However, for Zimbabwe to realise the full benefits of its statutory BJR, there is need for a shift in judicial perception when interpreting BJR related provisions, and a couple of legislative amendments have to be implemented.
The judiciary should, it is submitted, abandon the abstention doctrine based BJR under the common law and embrace an enhanced accountability approach consistent with the constitutional imperatives and a purpose driven interpretation of the pertinent COBE Act provisions. Unrestrained judicial deference to directors' decisions leads to abuse of corporate assets and managerial power, as was the case with most global corporate governance debacles in the last two decades. Such a shift in judicial disposition does not entail interference with the directors' prerogatives, and appropriately leaves "a certain degree of freedom or scope for making mistakes" by directors as fallible human beings. 163 In this way Zimbabwe's BJR will manifest as a standard of liability by which courts will be able to assign and impose liability for abuse of power without usurping the decision-making power of company directors.
With respect to the suggested legislative amendments, first, as has been alluded to above, the requirement that directors have to be fully informed when exercising a business judgment is far too restrictive. Also, the term "fully informed" offers little practical help when it comes to the question of whether the judiciary should apply a subjective or an objective standard. It is submitted that this defect can be cured through an amendment to the text of section 54(4)(b) of the new Act by replacing the phrase "fully informed" with "reasonably informed". The suggested amendment is also consistent with international best practice as envisaged by the Code. 164 Secondly, Zimbabwe's BJR does not explicitly forbid directors from being indirectly interested in any decision they have to make. This is a regrettable omission as it can be exploited by unscrupulous directors who may connive with their associates and related persons to abuse company resources. It is submitted that legislative amendment should be effected to cure this oversight. The shortcomings in the manner in which the BJR has been incorporated into the COBE Act mainly result from Zimbabwe's legislature borrowing foreign concepts from New Zealand, Australia and South Africa without giving due regard to the Zimbabwean company law context. It is submitted that those concepts should be refined or adapted to ensure a better fit with the Zimbabwean legal milieu.

Authors' contributions
The lead author did the research and developed the draft article. The co-author provided guidance and oversight in addition to assisting with the scholarly, language and technical writing aspects.