An assessment of corporate governance implementation in state-owned enterprises of the emerging economy

Abstract

South African state-owned enterprises (SOEs) form a critical cog in the state machinery. The significance of sound corporate governance has become more pronounced as citizens demand more accountability and value in the use of public resources (Vicente, 2020). The paper utilised a qualitative desktop approach, a case study design and thematic analysis to investigate board and executive management practices in the North West Development Corporation (NWDC) corporate governance, factors hindering good corporate governance and lastly recommendations that can be offered to enhance good corporate governance. The NWDC is a regional development finance institution in South Africa, which over the years has continued to implement adverse audit outcomes (AGSA, 2019b). The thematic analysis findings revealed a direct relationship between lack of consequence management and the state of poor corporate governance in the NWDC. The lack of ethical leadership lies at the heart of this morass of SOEs in general. The study, therefore, recommends the full implementation of the existing legislative framework, the Codes on Good Governance and the anti-corruption national strategy in order to inculcate accountability in the South African public agencies that include the NWDC. The paper is relevant in addressing the Auditor-General qualified audits, which underlines the ineffectiveness of the existing SOE governance system by not inherently correlating corporate success with the presence of deeper corporate governance standards and ethical behaviour.