Punuc E!'-1-nTIEs CoRPORATE GovERNANCE No. 4/2018 (b) Cap.l0:31 without just cause, fails or refuses to answer any question or provide any information or produce any document when required to do so in terms of subsection (l)(b); shall be guilty of an otTence and liable to a fine not exceeding level five or to imprisotmlent for a period not exceeding six months or to both such tine and such imprisonment. FIRST SCHEDULE (Sections 21, 31 and 45) KxrroNAL CoDE oN CoRPORATE GoVERNANCE Zr~1BABWE CHAPTER! APPUCATION oF THE CoDE Ai'<'D OJ:<~RrvxnvEs 1. This Code applies to all business entities regardless of the manner and fmm of their incorporation or establishment and whether the business entity is in the public or private sector or it is non-profit making. There are however certain entities which require a sector approach to corporate governance. Accordingly, codes which derive from the main principles of this Code are encouraged and should be developed. 2. Special sectors, such as the banking and financial services sector, pat1nerships, trusts and small to medium enterprises, should have specific codes of their own which take a sector approach to corporate governance. 3. The sector-based codes supplement and add value to, and should be read together with, this Code. 4. If a provision of a sector-based code is inconsistent with any principle of this Code then the principle of this Code prevails to the extent of that inconsistency. 5. Small to medium businesses, including family-owned businesses, constitute a special sector which requires special focus. Accordingly special principles and best practice recommendations for this sector should incorporate the provisiotL'> of the cunent legislation on small to medium enterprises and lift the bar on corporate governance above that prescribed in legislation. 6. The public sector has its own framework of governance which has been in existence since November2010. It is recommended that most of the provisions of this framework should be enacted into law so as to ensure its enforcement. In regard to this sector the enactment into law of the framework will be a shift from the "comply or explain" basis of corporate governance to the "comply or else" strategy. 7. Other sectors deserving special consideration will be considered as part of a review of this Ccxle or any derivative ccxle. PART II 0\VNERSHIP ANl) CoNTROL Preamble 8. In a company, shareholders provide risk capital which the management controls under the leadership of a Board of Directors. There must be a functional balance of power among these three groups for the company to prosper and for all the stakeholders to derive benefit. OWNERSiflP Principles 9. Corporate power should not be concentrated in one person or in a small group of persons because tl:lls will impact negatively on focused, effective and ethical corporate leadership and may result in corporate failure. 112