Faculty of Commerce, Law and Management (ETDs)

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Subject: search.filters.subject.Corporate governance

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Now showing 1 - 6 of 6
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    An analysis of the main barriers to effective corporate governance at the SABC
    (University of the Witswatersrand, Johannesburg, 2023) Loliwe, Wendy
    South Africa is a highly structured country with numerous rules, practices and regulations. These laws are imperative in the successful running of companies including State-owned Companies (SOCs). The SOCs including the South African Broadcasting Corporation (SABC) are governed by corporate governance framework which define the principles of fairness, accountability, responsibility and transparency – where role players are identified, those responsible for the corporate governance and to whom they are accountable. South Africa further considers its best corporate governance practises through implementation of various versions of the King Reports of Good Corporate Governance which have their foundations in effective and ethical leadership. In some instances, SOCs can be forced into complying with those laws which can lead to poor corporate governance and dysfunctionality of a company. In the case of the SABC, there were numerous allegations of maladministration, financial mismanagement, unethical conduct, abuse of power, political interference and governance challenges. The study is therefore concerned with the effective corporate governance at the SABC. It examines the main barriers to effective corporate governance rules and practices within the SABC or, put differently, why good corporate governance has eluded the SABC. The study applied the qualitative approach. The primary data was collected though semi-structured interviews - from former and current members of the boards of directors, government as a shareholder, former and current officials, representatives of the regulator and other experts in public broadcasting. The secondary data has been examined from various archival resources such as SABC Annual Financial Statements and Reports and policies which are useful for triangulation. It was found that the main barriers identified include political parties interference, lack of board commitment to fulfill its oversight role, abuse of shareholder’s power, no consequence management in transgression and performance monitoring systems, iii lack of adherence to the regulatory framework, appointments of unqualified and unskilled board member, lack of transparency and disclosure, and SABC funding. Based on the findings, it was concluded that The SABC has enough applicable legislation and internal policies to protect itself from abuse by the shareholder and ensure good corporate governance but effective enforcement of existing laws and regulations constitutes a major challenge for the development and implementation of corporate governance.
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    Corporate governance of robotic process automation by South African firms
    (2023) Nortje, Anri
    Traditional corporate governance policies and principles do not make provision for the implications of new technologies, like robotic process automation, on digital business. Without the appropriate governance of technologically-enabled advancements, firms are exposed to new threats and face increased vulnerabilities. Using constructivism, this study aimed to understand which governance principles firms in South Africa should have in place for the use of robotic process automation. The study finds that the governance of robotic process automation depends on (i) digital governance and risk management, (ii) cybersecurity and data protection, and (iii) digital business ethics considerations that firms need to address when they deploy robotic process automation software. Based on the findings and the data analysis, the study formulates a model for the governance of robotic process automation called “an expanded model for RPA governance in South African digital business”. From this model, the study concludes with seven governance principles, proposed by the researcher, to assist South African firms with the governance of robotic process automation.
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    Enterprise risk management, corporate governance, performance and risk-taking behaviour of the insurance industry: empirical evidence from Ghana and South Africa
    (2022) Horvey, Sylvester Senyo
    The growing complexities in the business environment have led to the adoption of enterprise risk management (ERM). ERM is a new approach to managing organisational risks holistically to achieve its goals. Regardless of the diversities in the business environment, ERM has become an essential factor for businesses and is believed to enhance shareholder value. Despite the growing number of studies on ERM, literature suffers some limitations regarding its proxies and inconclusive results between ERM and performance. This study adopts a more comprehensive measurement of ERM, which captures various characteristics (such asrisk governance, operational mechanisms, and quality of risk oversight) within the risk ecosystem. The study uses a panel regression technique on a sample of 33 and 63 insurers from Ghana and South Africa, respectively, covering 2015-2019. This thesis is centred on four thematic papers. Each focuses on a specific subject (s) at the heart of the problems or research questions being investigated. The first paper provides a comprehensive and systematic literature review on the measurement and performance of ERM. Google Scholar was the primary search tool for ERM literature spanning 2001 to 2020, and papers listed in SCImago journal ranking were discussed. The study finds that most studies rely on secondary sources, particularly the Chief Risk Officer’s appointment, as a simple ERM proxy. This is widely adopted in the literature due to the difficulty in assessing ERM information. The study recommends that empirical measurement of ERM rely on both primary and secondary data as they complement each other and allow more insight and factors to be considered for a robust ERM measurement. In terms of performance, the ERM literature reveals mixed findings, but enough evidence supports the assertion that ERM enhances firm profitability and value. The study suggests that scholars consider examining the ERM-performance relationship in emerging economies as most of these studies centred on the US and European economies. The second paper analyses the determinants of ERM adoption in Ghana and South Africa using a panel logistic regression technique. Building on the contingency theory, the study posits that several factors contribute to ERM adoption. The study finds that firm size, ownership, leverage, industrial diversification and the type of audit firm are positively associated with ERM adoption in both countries. Findings from the quantile regression also highlight that the initial levels of size, profitability and leverage reduce ERM adoption, and an extreme increase in these factors promotes iii ERM adoption, which implies a nonlinear direct U-shape relationship. On the contrary, the study sees an inverted U-shape for return on assets and leverage for Ghana. Industrial diversification, Big4 audit companies and ownership show consistent patterns of a significant positive effect on ERM adoption at different quantiles for both samples. The findings support the fact that insurers could improve their risk management system by considering the factors that significantly affect them. The third paper first examines the impact of ERM on insurance performance (underwriting performance and Return on Assets) and second investigates how corporate governance (CG) characteristics such as the board size, board independence, and gender diversity interact with ERM in affecting insurance performance. The major findings are summarised as follows: (1) a positive relationship exists between ERM and insurance performance for both countries; and (2) board size, board independence and gender diversity interact with ERM in affecting underwriting performance and return on assets. This was mostly positive and significant in both samples. The study suggests that insurers interested in ensuring an effective ERM system should leverage these corporate governance factors to appreciate the overall impact of ERM on performance. In the final paper, the study examines the linear and non-linear effects of ERM and CG on risktaking behaviour. The result from the linear regression elicits a significant positive relationship between ERM and risk-taking for both countries, implying that insurers with a strong ERM system are more likely to pursue higher risks. The empirical evidence also suggests that board size and board independence have a significant positive impact on risk-taking for both samples. In contrast, gender diversity shows an inverse relationship with risk-taking. Using the dynamic panel regression by Seo et al. (2019), the study confirms non-linearities between ERM, CG and risktaking. Evidence from the South African sample indicates that ERM significantly increases insurers’ risk-taking beyond the threshold level. Again, the South African sample shows significant threshold levels for board size, gender diversity and board independence at 10.03, 0.274 and 0.547, respectively. The Ghanaian sample also documents significant threshold levels at 7, 0.286, and 0.692. The study recommends that insurers consider the significant threshold levels to determine the optimum level of risk that must be pursued.
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    The effects of politics, institutions and corporate governance on South Africa’s FDI flows
    (2021) Mokgashi, Moshibudi
    This paper explores the linkage between political risk, corporate governance, institutions and foreign direct investment inflows in the context of South Africa. The study was prompted the by the ever-changing political stability of the country, corporate governance and corruption challenges and their impact on doing business in SA. It is conducted using secondary data for World Governance Indicators (WGI) collected from World Bank’s online database and World Competitiveness from the World Economic Forum (WEF). The relationship was estimated using the Generalised Method of Moments (GMM) econometric technique for the period of 1996 to 2019. For political risk and institutions, governance variables were used. These are rule of law, political stability, control of corruption, voice and accountability, government effectiveness, and regulatory quality. For corporate governance, Ethical Behaviour of Firms and Efficacy of Corporate Boards competitiveness variables were used. Trade Openness, Inflation Rate and Gross Domestic Product growth were used as control variables. The findings of this report indicate that weak governance impacts FDI inflows negatively. The econometric estimates show that tolerance for corruption, government ineffectiveness, lack of rule of law, political instability, poor regulatory quality and accountability have negative impact on FDI inflows. Whilst all six variables indicated significant impact on FDI, rule of law and lack of control of corruption show the most impact. The implication is that this should be an area of focus to improve and therefor positively impact FDI. Overall, the government should reduce political instability and policy makers should employ policies and strategies to improve doing business in South Africa to attract and maintain investors
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    Audit committee effectiveness: perspectives from South African audit committee members of JSE-listed companies
    (2021) Von Willich, Kita
    This study investigates audit committee effectiveness from the perspective of South African audit committee members. Data were collected from 10 semi-structured open-ended interviews. The observations of 6 current audit committee members of companies listed on the Johannesburg Stock Exchange (JSE) were analysed and corroborated by the opinions of 2 external audit partners, an internal auditor and a regulator of accounting and governance. This research found that the levels of audit committee effectiveness of JSE-listed companies are poor. Nevertheless, respondents were of the opinion that there seems to have been a marked improvement from 10 or 15 years ago. Poor audit committee effectiveness has been attributed to overreliance on management for information and the lack of diligence to perform independent in-depth enquiry
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    The role of Internal Audit Function (IAF) in integrated reporting in state owned entities and possible challenges to IAF's involvement, and potential future role of IAF in integrated reporting
    (2019) Makhathini, Hlengiwe Thandeka
    Orientation: Integrated Reporting (IR) is a developing reporting approach that assists companies to efficiently report in a concise manner. IR provides financial and non-financial information, and for the report to be credible to stakeholders, it requires assurance. Currently, there are no assurance frameworks for IR, and there are various types of assurance providers. Research Aim: The primary aim of the study is to understand the role that the Internal Audit Function (IAF) of State-Owned Entities (public entities) in South Africa plays in IR, to understand challenges associated with playing this role and to identify the future role of IAF in IR. Motivation for the study: In South Africa, the top 18 SOEs have an asset base of over R1.1 trillion and generate turnovers of over R395 billion which is testimony that they play a critical role in the economy. To improve communication of key objectives and how the mandate of the entity is being achieved, several public entities have voluntarily adopted IR. In the provision of information, there is always a risk of accuracy, validity and completeness and as a result King Code recommends that independent assurance be provided on IR. The assurance will increase the legitimacy of IR to the various stakeholders. There are several potential assurance providers for IR. IAF already plays an assurance role in terms of internal controls and the control environment of an entity, and therefore, has the potential to play a significant role in IR. The motivation for the study is therefore, to understand if the IAF of public entities has embraced this potential role; to understand challenges associated with playing this role and to identify what the potential future role might be. Research approach and method: A qualitative approach was followed, and data was collected through semi-structured interviews to explore the current environment and role played by the IAF. The data collection process involved interviewing Chief Audit Executives (CAEs) or Heads of Internal Audit of SOE’s, and thematic analysis was used to analyse the findings. Findings: The findings from this study are that corporate governance; the operating environment and the skills & capacity of the IAF are critical for the IAF to play a meaningful role in the IR process. Most CAEs highlighted the need for the IAF to be a proactive partner to the business in the IR process to add value and achieve a higher buy-in from stakeholders. Contributions: This study contributes the to the existing body of knowledge on IR in the public sector; specifically, in terms of highlighting the role and challenges of the IAF in the preparation of IR as well as identifying the potential future role of the IAF in IR