Corporate governance in major South African state-owned enterprises
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Date
2018
Authors
Ngwenya, Bongani
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Abstract
ABSTRACT
As a result of SOEs continued dependence on government bailouts and everincreasing
embroilment in corruption scandals this study aims to establish the
nature of the relationship that certain corporate governance related
characteristics have on the performance of major SOEs in South Africa.
Schedule 2 of the PFMA lists the 21 firms considered to be major public SOEs
in South Africa. This list formed the basis for the SOE’s that were included in
the study. A study of the relevant literature was used to determine the
appropriate governance and performance metrics before data was then
collected from publicly available sources on these metrics. The data collected
was then used to perform a regression analysis in order to explore the
relationship between governance and performance. It is found that there is a
significant negative relationship between the number of board meetings held
and SOE performance. Secondly, female representation on the board has a
direct and positive influence on the after-tax profits of an SOE. Thirdly, SOEs
with higher paid CEOs produced higher after-tax profits than those with lower
paid CEOs. Finally, CEOs with tenure of less than a year are able to deliver
performance gains over their longer tenured counterparts.
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Keywords
Corporations -- South Africa. Corporate governance -- South Africa.