The importance of corporate governance in the financial sector: a comparative analysis between Botswana and South Africa
Date
2024
Authors
Journal Title
Journal ISSN
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Publisher
University of the Witwatersrand, Johannesburg
Abstract
Corporate Governance is key to the integrity of financial markets and by extension the attraction of foreign direct investment (FDI) flows. It is a result of the split
between owners and managers of businesses due to clashes in the interests of the parties. This is called the ‘agency’ problem. Problems and mechanisms of
governance are different across countries, with governance issues in more developed countries finding their expression in wide shareholder bases while
developing economies have smaller and more concentrated structures. Corporates have collapsed in the past due to poor Corporate Governance practices. Examples include Enron, WorldCom, Steinhoff and African Bank Investments Limited (ABIL).
The study was motivated by recent reports of corporate governance scandals in Botswana including in relation to board composition, the integrity of financial
information and related party transactions. The study is qualitative and seeks to compare corporate governance practices between financial services companies
listed on the Botswana Stock Exchange (BSE) and the Johannesburg Stock Exchange (JSE), as well as the level of compliance with recommended practices.
A review of literature was carried out in the study where theoretical frameworks including the agency, stakeholder, stewardship, and resource dependence theories
were explored. The study examined empirical frameworks, discussing Corporate Governance developments in Botswana (local), South Africa (regional) and the
United Kingdom (global).
Secondary data sources were used to collect data, specifically integrated reports. After analysing the data collected, recommendations were made based on the
findings. These include improvements in solvency disclosures, material matters disclosure, materiality determination process disclosure, approval of integrated
reports by the board, and disclosure requirements around succession planning. A further recommendation is to institutionalise Corporate Governance and make it
part of the listing requirements
Description
A study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration to the Faculty of Commerce, Law and Management, Wits Business School, University of the Witwatersrand, Johannesburg, 2024
Keywords
Corporate Governance, Principals, Agents, UCTD
Citation
Isaacs, Pulafela Floyd . (2024). The importance of corporate governance in the financial sector: a comparative analysis between Botswana and South Africa [Master’s dissertation, University of the Witwatersrand, Johannesburg].WireDSpace.