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1
Diamond, G., and G. Price. "The political economy of corporate governance reform in South Africa." South African Journal of Business Management 43, no. 1 (March 30, 2012): 57–67. http://dx.doi.org/10.4102/sajbm.v43i1.176.
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This study describes the political-economic dimension of corporate governance reform in South Africa. It then investigates the relationship between corporate governance institutions and systems on the one hand and the political, economic and historical context of South African society on the other. The study establishes the political, economic and historical determinants of corporate governance reform as they evolved in the course of South African corporate history. The study concludes that South African corporate governance reform and such reform in the Commonwealth economic systems have a lot in common in terms of their historical evolution. This is despite the reasons for such reform being vastly different. The outcome of the political process in South Africa, for very specific reasons, is that a specific shareholder model of corporate governance became the corporate governance system in South Africa.
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Smith, Rozanne, and Ben Marx. "Corporate Governance Practices in Large and Medium-Sized Auditing Firms in South Africa." International Journal of Management and Sustainability 11, no. 4 (November 29, 2022): 202–20. http://dx.doi.org/10.18488/11.v11i4.3209.
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South African corporate failures and audit failures, including those of VBS Bank, Tongaat, Steinhoff and KPMG, have exposed vulnerabilities in audit quality and the role of governance failures in auditing firms. In auditing firms, good corporate governance principles are not always followed. Additionally, South Africa does not have a corporate governance code that governs auditing firms, nor is there a sector supplement to the King IV Report on Corporate Governance that applies to other industries. To identify areas for improvement in South Africa, this study aimed to ascertain the current corporate governance practices in South African auditing firms and compare them to the United Kingdom (UK) Audit Firm Governance Code. A structured questionnaire based on the UK Audit Firm Governance Code was used to collect qualitative data. Nine large and medium-sized South African auditing firms with 20 or more auditing partners made up the population. The literature study emphasised the value of good corporate governance in auditing firms, as well as the difficulties these firms encounter with corporate governance. The review also emphasised the absence of codes and standards regulating corporate governance in auditing firms. The empirical results highlighted the resultant inconsistencies in corporate governance application in South African auditing firms. Areas requiring improvement were identified in the study.
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Mohamad, Shafi. "National corporate governance codes and IT governance transparency." Corporate Ownership and Control 16, no. 1 (2018): 13–18. http://dx.doi.org/10.22495/cocv16i1art2.
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The main purpose of this paper is to explore the influence of national corporate governance codes on IT governance transparency and was carried out by comparing the IT governance disclosure requirements across two jurisdictions Belgium and South Africa using the study by Huygh et al. (2017). The latter focused on these two countries since the South African corporate governance code King III (2009) contains detailed IT governance disclosures, while the Belgian corporate governance code Lippens (2009) does not. Huygh et al. (2017) found that listed South African financial services organizations were more concerned with disclosing their IT governance practices than their listed Belgian counterparts and that this observation held across the board for all four disclosure categories within the IT governance transparency framework. Further analysis at an individual item-level also found that many of the items for which the South African respondents reported frequently could be directly traced to the IT governance principles and recommended practices contained in the King III (2009) corporate governance code. Huygh et al. (2017) attributed the higher IT governance transparency of the South African respondents to the specific reporting requirements of their national corporate governance code King III (2009). Hence the recommendation that IT governance disclosures be proactively encouraged via national corporate governance codes to further enhance transparency.
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Young, Jackie. "Corporate governance and risk management: a South African perspective." Corporate Ownership and Control 7, no. 3 (2010): 138–48. http://dx.doi.org/10.22495/cocv7i3p10.
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A code of governance is crucial for any emerging country as it endeavours to provide a sound management framework and principles. Corporate governance and risk management are fairly new management concepts, but are becoming important management disciplines for the public and private sectors in South Africa. The aim of this paper is to provide insight into corporate governance and risk management from a South African perspective. South Africa is regarded as one of the more advanced countries in Africa, although still an emerging country with huge development potentials. However, should corporate governance and risk management principles be lacking and not adequately developed and implemented, the aforementioned potential will be nullified and could negatively affect the economic growth and well-being of the country.
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Afolabi, Adeoye Amuda. "The key challenges of corporate governance of firms: Empirical evidence from Sub-Saharan African anglophone (SSAA) countries." Corporate Ownership and Control 13, no. 3 (2016): 415–33. http://dx.doi.org/10.22495/cocv13i3c3p1.
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This paper uses empirical evidence to identify views about the important components of good corporate governance practice for listed firms in Sub-Saharan African Anglophone countries. This study used survey questionnaire based on international corporate governance norms, data were collected from listed firms in Ghana, Nigeria and South Africa. The findings include: In Ghanaian and South African firms there are evidence that regulatory framework and enforcement of corporate governance promote sound corporate governance system. This study revealed that commitment of board of directors to disclosure and communication may provide effective corporate practices. Political environment and ownership structure of firms’ hinder sound corporate governance practices. Accounting system operating in each country plays a vital role in promoting sound corporate governance system. However, societal, cultural and corruption seem to deter corporate governance system in Ghanaian and South African firms. We recommend that there should be prudent monitoring of corporate governance rules and enforcement.
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Matsiliza, Noluthando Shirley. "Corporate governance of the state-owned enterprises in an emerging country: Risk management and related issues." Risk Governance and Control: Financial Markets and Institutions 7, no. 3 (2017): 35–43. http://dx.doi.org/10.22495/rgcv7i3p4.
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This article assesses the extent to which state owned enterprises (SOE) have complied with corporate governance codes, as recommended by King III in South Africa. Corporate governance in the post-apartheid era has changed irrevocably. The development path which is the agenda to transform state owned enterprises has been a trial and error (trend) in South Africa. This paper argues that the South African State Owned Enterprises (SOEs) have applied the King III principles of corporate governance, while grappling with structural changes that impact in their practice regarding their organisational performance on risk and corporate governance. Along with regulatory measures on corporate governance, the SOEs are looking at strategies to translate the concept of corporate governance into practical solutions that involve stakeholders and government support. Using a qualitative approach, this theoretical paper employed document analysis for data collection and analysis. This paper calls for more risk intelligent management of agencies so that future opportunities and threats are recognized and addressed promptly and effectively. The value of this paper is based on its contribution to the existing knowledge area on corporate governance and leadership.
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Clayton, Alexandra F., Jayne M. Rogerson, and Isaac Rampedi. "Integrated reporting vs. sustainability reporting for corporate responsibility in South Africa." Bulletin of Geography. Socio-economic Series 29, no. 29 (September 1, 2015): 7–17. http://dx.doi.org/10.1515/bog-2015-0021.
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AbstractLarge corporates have come under increasing pressure to conduct their business in a more transparent and responsible manner. In order for business to fulfil its obligations under the ethic of accountability stakeholders must be given relevant, timely, and understandable information about their activities through corporate reports. The conventional company reports on annual financial performance, sustainability and governance disclosures often fail to make the connection between the organisation’s strategy, its financial results and performance on environmental, social and governance issues. Recognising the inherent shortcomings of existing reporting models, there is a growing trend to move towards integrated reporting. South Africa has been one of the most innovative countries in terms of integrated corporate reporting. Since 2010 companies primarily listed on the country’s major stock exchange have been required to produce an integrated report as opposed to the former sustainability report. The aim in this study is to review the development of integrated reporting by large corporates in South Africa and assess the impact of the required transition from sustainability reporting to integrated reporting on non-financial disclosure of eight South African corporates using content analysis of annual reports.
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Croucher, Richard, and Lilian Miles. "Corporate Governance and Employees in South Africa." Journal of Corporate Law Studies 10, no. 2 (October 2010): 367–89. http://dx.doi.org/10.5235/147359710793129435.
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Andreasson, Stefan. "Understanding Corporate Governance Reform in South Africa." Business & Society 50, no. 4 (February 18, 2009): 647–73. http://dx.doi.org/10.1177/0007650309332205.
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Adebayo, Adeyemi, and Barry Ackers. "Comparing corporate governance practices of state-owned enterprises (SOEs) in South Africa and Singapore." Journal of Accounting and Investment 23, no. 1 (January 31, 2022): 170–95. http://dx.doi.org/10.18196/jai.v23i1.13830.
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Research aims: This paper undertakes a cross-country comparative analysis of corporate governance of state-owned enterprises (SOEs) in South Africa and Singapore, two countries using two different models for organising SOEs, with specific reference to agreement with the themes identified in the World Bank’s Framework for good Corporate Governance practices for SOEs. The aim of this paper is to identify differences and similarities in practice and to document how the states have fared using different models.Design/Methodology/Approach: The paper deploys a pragmatic mixed methods approach conducted in two phases, to understand the practices utilised by South African and Singaporean SOEs. The data emerging from these two phases, were compared to the Framework for good Corporate Governance practices for SOEs issued by the World Bank.Research findings: Findings suggest although South African SOEs have good corporate governance practices in place, Singaporean SOEs are better organised and governed compared with South African SOEsTheoretical contribution/Originality: This paper contributes to the scholarly discourse on SOEs in by expanding the discourse on public sector entrepreneurship and opening up new debates and research areas corporate governance of SOEs.
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Mantey, Nicholas Otu. "Management’s Fiduciary Responsibility Towards IT Governance In The Context Of The King III Code Of Corporate Governance In South Africa." Advances in Social Sciences Research Journal 8, no. 10 (October 18, 2021): 90–105. http://dx.doi.org/10.14738/assrj.810.9753.
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The purpose of this study was to examine the extent to which South African listed companies trading on the Johannesburg Securities Exchange (JSE) are complying with IT governance imperatives in the context of the King III Code of Corporate Governance. Management information systems and usage of computers are now embedded in business processes to the extent that most firms will be dysfunctional should these tools become unavailable. The underlying theoretical setting for this study is anchored on the agency theory and the Porter’s competitive five forces model. Since there were inadequate constructs on the subject, a combination of research methods were used: desk-top review, exploratory study, and content analysis, by reviewing the annual financial statements of fifty JSE-listed companies (the main board) in South Africa. The general outcome of the study was that JSE-listed companies in South Africa were compliant with IT governance practices as prescribed in the King III Code of Corporate Governance. Most JSE-listed companies in South Africa utilized both generic and bespoke or owned-designed IT governance frameworks to meet IT governance requirements. The study also revealed that issues relating to IT governance were among priority issues for South African listed companies. The study concludes that JSE-listed companies in South Africa have indeed fulfilled their fiduciary responsibility towards IT governance.
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Gachie, Wanjiru, and Desmond Wesley Govender. "PRACTICAL APPLICATION OF CORPORATE GOVERNANCE PRINCIPLES IN A DEVELOPING COUNTRY: A CASE STUDY." Risk Governance and Control: Financial Markets and Institutions 7, no. 2 (2017): 67–75. http://dx.doi.org/10.22495/rgcv7i2art7.
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The importance of examining corporate governance in organisations cannot be overemphasised. Corporate governance failure which has resulted from weak corporate governance systems has highlighted the need for research aimed at contributing to the improvement and reform of corporate governance at business, national and international level. A review of corporate governance mechanisms and their practical application in two retail companies in South Africa was undertaken. The research question that informed the study was: What is the nature of corporate governance mechanisms in the South African retail sector? The research design entailed analysis of secondary data, namely Annual Reports and other pertinent documents, and document analysis was used to show what is accessible to the ordinary share/stake-holder and what is not. Data analysis was conducted both qualitatively and quantitatively. With regard to corporate governance mechanisms, the results and discussion show that the two companies have not yet complied with the King II and III codes. Recommended strategies to strengthen corporate governance mechanisms in the South African retail sector should include a commitment to risk disclosure and revamping of the corporate governance structure of the ‘whole’ system.
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Hamadziripi, Friedrich, and Howard Chitimira. "The Integration and Reliance on Technology to Enhance the Independence and Accountability of Company Directors in South Africa." Potchefstroom Electronic Law Journal 24 (June 29, 2021): 1–32. http://dx.doi.org/10.17159/1727-3781/2021/v24i0a10737.
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The most indispensable means of change in contemporary business society is technology because it offers convenience to both businesses and their clients. Almost every business has been influenced by technology. Traditional corporate governance systems have been affected as technology has ceased to be a mere business enabler but is now a source of a company's future potential opportunities. The infusion of corporate governance and technology has been quite slow in South Africa. This may either be attributed to the fact that it is costly to do so, at least in the short term, or that company directors in South Africa do not yet trust technological measures with corporate decision-making input. Consequently, the impact of decision support technology on corporate entities and their governance has received less academic interest in South Africa than in developed countries. This article seeks to discuss the integration and reliance on technology to enhance corporate governance principles in developing countries like South Africa. The article also discusses the practical challenges and the benefits to be anticipated by directors in South Africa when they integrate technology in decision making to enhance their independence and accountability.
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Mbecke, Paulin. "Corporate municipal governance for effective and efficient public service delivery in South Africa." Journal of Governance and Regulation 3, no. 4 (2014): 98–106. http://dx.doi.org/10.22495/jgr_v3_i4_c1_p2.
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This research acknowledges the current service delivery chaos manifested through numerous protests justifying the weakness of the “Batho Pele” good governance principles to facilitate, improve and sustain service delivery by local governments. The success of corporate governance in corporate companies and state owned enterprises is recognised prompting suggestions that local governments should too adopt corporate governance principles or King III to be effective. The research reviews the King III and literature to ascertain the lack of research on corporate governance in local governments in South Africa. Considering the particular set-up of local governments, the research doubts the successful application of King III in local governments. Through critical research theory, the current service delivery crisis in local governments in South Africa is described. The success of corporate governance systems in the United Kingdom and Australian local governments justify the need for a separate corporate municipal governance system as a solution to the crisis. A specific change of legislation and corporate governance guidelines is necessary to address the uniqueness of local governments. Hence, corporate municipal governance should be compulsory and based on ten standardised good governance principles via a code of corporate governance and a corporate governance framework responding to specific prerequisites for success
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Tshipa, Jonty, and Thabang Mokoaleli-Mokoteli. "The South African code of corporate governance. The relationship between compliance and financial performance: Evidence from South African publicly listed firms." Corporate Ownership and Control 12, no. 2 (2015): 149–69. http://dx.doi.org/10.22495/cocv12i2p12.
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Using both Return On Assets (ROA) and Tobin’s Q as proxies for performance, the study seeks to explore if better governed firms exhibit greater financial performance than poorly governed firms. The paper employs a panel study methodology for a sample of 137 Johannesburg Stock Exchange (JSE) listed firms between 2002 and 2011. The results show that the compliance levels to corporate governance in South Africa (SA) has been improving since 2002 when King II came into force. However, the compliance level in large firms appears to be higher than in small firms. Further, the findings show that the market value of large firms is higher than that of small firms. These results largely support the notion that better governed firms outperforms poorly governed firms in terms of financial performance. Notably, the empirical results indicate that board size, CEO duality and the presence of independent non-executive directors positively impact the performance of a firm, whereas board gender diversity, director share-ownership and frequency of board meetings have no impact on firm performance. This suggests that greater representation of independent non-executive director, a larger board size and the separation of CEO and Chairman should be encouraged to enhance firm performance. Unexpectedly, the presence of internal key board committees, such as remuneration, audit and nomination, negatively impact firm performance. Similar to UK, South Africa has a flexible approach to corporate governance, in which listed firms are required to apply or explain non-conformance to King recommendations. This study has policy implications as it determines whether the flexible corporate governance approach employed by SA improves corporate governance compliance than the mandatory corporate governance approach as employed by countries such as Sri Lanka and US, and whether compliance translates into firm performance. The significant finding of this study is that compliant firms enjoy a higher firm performance as measured by ROA and Tobin’s Q. This implies that compliance to corporate governance code of practice matters, not just as box ticking exercise but as a real step change in the governance of South African listed firms. This paper fulfils an identified need of how compliance to corporate governance influences firm performance in South Africa. The findings have implications to JSE listing rules, policy, investor confidence and academia.
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Vettori, Stella. "Employee as Corporate Governance Stakeholder in South Africa." Social Responsibility Journal 1, no. 3/4 (March 2005): 142–48. http://dx.doi.org/10.1108/eb045804.
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Makiwane, Theophilus S., and Nirupa Padia. "Evaluation of corporate integrated reporting in South Africa post King III release South Africa: An exploratory enquiry." Journal of Economic and Financial Sciences 6, no. 2 (July 31, 2013): 421–38. http://dx.doi.org/10.4102/jef.v6i2.268.
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Following the release of the King III report on Corporate Governance for South Africa, which became effective in March 2010, South African companies are expected to embrace the concept of integrated reporting in terms of which they are required to provide details of their strategies, corporate governance, risk management processes, financial performance and sustainability. More importantly, companies need to show how these components of integrated reporting are linked to one another so that stakeholders can make informed decisions about such companies’ current performance as well as their ability to create and sustain value in the future. The purpose of this study was to determine whether the level of reporting by South African listed companies has improved since the release of the King III report. It was subsequently found that there have been some progress in this regard, but there is still much room for improvement if the objectives of integrated reporting are to be fully met.
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Waweru, Nelson. "Business ethics disclosure and corporate governance in Sub-Saharan Africa (SSA)." International Journal of Accounting & Information Management 28, no. 2 (March 2, 2020): 363–87. http://dx.doi.org/10.1108/ijaim-07-2019-0091.
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Purpose The purpose of this paper is to examine the relationship between business ethics practices disclosure and corporate governance characteristics in Sub-Saharan Africa. Design/methodology/approach The study uses multiple regression to investigate the association between business ethics disclosure (BED) and corporate governance characteristics in SAA. The study sample is based on 573 non-financial corporations listed on the national stock exchanges of Ghana, Kenya, Nigeria, South Africa and Zimbabwe as of 31 December 2015. Findings The findings show that corporate governance characteristics (including the proportion of government ownership, board independence and board gender diversity) are positively and significantly related to BED. Originality/value The study contributes to the limited literature by analyzing the relationship between BED practices and corporate governance characteristics in the sub-Sahara African context, which is significantly different from the Anglo-Saxon world.
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Khumalo, Muzi, and Adrino Mazenda. "An assessment of corporate governance implementation in state-owned enterprises of the emerging economy." Journal of Governance and Regulation 10, no. 4 (2021): 59–69. http://dx.doi.org/10.22495/jgrv10i4art5.
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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.
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Tshipa, Jonty, Leon Brummer, Hendrik Wolmarans, and Elda Du Toit. "The impact of flexible corporate governance disclosures on value relevance. Empirical evidence from South Africa." Corporate Governance: The International Journal of Business in Society 18, no. 3 (June 4, 2018): 369–85. http://dx.doi.org/10.1108/cg-05-2017-0106.
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PurposeConsidering that the Johannesburg Stock Exchange (JSE) has enacted in its Listings Requirements, compliance of listed firms to International Financial Reporting Standards (IFRS) and King Code of Good Corporate Governance, this study aims to investigate the impact of internal corporate governance attributes on the value relevance of accounting information in South Africa.Design/methodology/approachThe fixed effect generalised least squares regression is used for the period from 2002 to 2014. Proxies for internal corporate governance are the size of the board, leadership structure, board activity, staggered board, boardroom independence, presence of key committees and board gender diversity. Value relevance is measured using the adjustedR2derived from a regression of stock price on earnings and equity book values by following Ohlson’s accounting-based valuation framework.FindingsThe findings suggest that the net asset value per share is value-relevant in South African listed firms and also when the boardroom is largely independent. The value of earnings per share (EPS) is more robust when corporate governance structures, such as separating the roles of chief executive officer and chairperson, proportion of board-independent board members and presence of board committees, are in place. This suggests that EPS favours agency and resource dependence theories.Practical implicationsThe value relevance of accounting information in the South African financial market underscores the importance of requisite rules and supervision regarding financial reporting to allow asset owners and managers in the allocation of capital decisions. This study supports the view that corporate governance plays a key role in ensuring, amongst others, credible financial reporting. The outcome of this study could inform the JSE to enforce, even stricter, compliance with IFRS and corporate governance to improve the value relevance of financial information.Social implicationsSignificant corporate governance reforms around the world suggest that regulators and policy makers consider corporate governance as a pertinent tonic in ensuring, amongst others, credible financial reporting. The implications of the study might assure users of financial information of how compliance to corporate governance practices may influence the value of the firm. This paper provides empirical evidence in the South African context that EPS, unlike net asset value per share, is driven by corporate governance structures.Originality/valueThe period of this study is unique, because it covers a relatively stable economic period before the financial crisis, a challenging and unstable period of time when the financial crisis materialised, and the aftermath of the financial crisis. In addition, the examination period of the study also covers the two corporate governance reforms in South Africa, King II in 2002 and King III in 2009, as well as the new Companies Act No. 71 of 2008. These exogenous factors may influence the results.
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Gyapong, Ernest. "Towards a “hybrid” African corporate governance model: Evidence from post apartheid South Africa." Corporate Ownership and Control 12, no. 3 (2015): 419–27. http://dx.doi.org/10.22495/cocv12i3c4p3.
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This paper investigates how unique socio economic conditions have hybridized the Anglo-American corporate governance (CG) model in South Africa (SA). The paper evaluates two key questions. (1) Are the Anglo-American and the continental European CG models converging to a hybrid model?(2) How Does the infusion of the “ubuntu” philosophy and affirmative action rules into the Anglo-American CG model create a “hybrid” African CG model in South Africa? In making these assessments we explore the shareholder and the stakeholder models of CG and assess these models are converging. We next explore CG in SA and examine how the African “ubuntu” philosophy and the inclusion of the various affirmative action rules in South African CG have created a “hybrid” African CG model.
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Alhassan, Abdul Latif, and Mary-Ann Afua Boakye. "Board characteristics and life insurance efficiency in South Africa." Pacific Accounting Review 32, no. 2 (March 31, 2020): 217–37. http://dx.doi.org/10.1108/par-06-2019-0066.
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Purpose In their role as monitors and advisors, boards are expected to address agency conflicts associated with the separation of ownership from control in large corporations. The ability to effectively perform these functions and enhance corporate outcomes largely depends on their influence in decision-making. This paper aims to examine the effect of corporate governance attributes, in the form of board characteristics, on technical efficiency in the South African life insurance industry. Design/methodology/approach Using the two-stage data envelopment analysis technique, bootstrapped efficiency scores are estimated for 73 insurers from 2007 to 2014 in Stage 1. The truncated bootstrapping procedure of Simar and Wilson (2007) and the tobit estimation techniques are used to examine the effect of corporate governance characteristics and other insurer level attributes on technical efficiency scores in Stage 2 analysis. Findings The findings suggest that life insurers operate with high levels of inefficiency within a highly independent governance structure. The results from Stage 2 analysis identifies audit committee size and independence to improve efficiency while board independence is found to be detrimental to efficiency. Practical implications The findings provide a useful reference point for insurance regulators in developing economies in the formulation of an effective governance mechanism for the efficient operation of the insurance industry. Originality/value As far as the authors are concerned, the analysis contained in this paper presents the first empirical assessment of the corporate governance structure and its effects on corporate outcomes in an African insurance market.
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Mugova, Shame. "Trade credit and bank credit as alternative governance structures in South Africa: evidence from banking sector development." Banks and Bank Systems 12, no. 3 (October 9, 2017): 204–14. http://dx.doi.org/10.21511/bbs.12(3-1).2017.05.
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Financial sector development is an influential force that outlines the financing and governance of firms in emerging economies. Suppliers and bankers represent alternative governance structures to a firm because of their trade credit and loan requirements, respectively. The continuous monitoring of investment by banks and suppliers impacts on corporate disclosure and practices. The study compares a sample of Johannesburg Stock Exchange (JSE) firms listed on the Socially Responsible Investment (SRI) index which measures corporate governance and those not listed on the index. A Generalized Least Squares (GLS) random effect regression of banking sector development and trade credit of firms listed on the JSE SRI and non-SRI listed firms was done to ascertain whether trade credit gives firms a preferred governance system and structure. The findings affirm that good corporate governance practices improve access to bank loans for working capital financing and good governance practices do not consequently result in more bank loan as a preferred governance structure for working capital financing compared to use of trade credit.
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Barac, Karin, and Ben Marx. "Corporate governance effectiveness and value added at South African higher education institutions: A registrar’s view." Journal of Economic and Financial Sciences 5, no. 2 (October 31, 2012): 351–72. http://dx.doi.org/10.4102/jef.v5i2.289.
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Higher education institutions are faced with many challenges in fulfilling their core mandate of teaching, research and community engagement. To achieve this, strong, sound and visionary institutional leadership is required, which should be embedded in sound corporate governance practices. The study aims to ascertain what registrars’ views on the effectiveness and value added by current corporate governance practices of higher education institutions (HEIs) in South Africa are. This was done through a literature review and supported by empirical evidence obtained from questionnaires addressed to registrars of public HEIs in South Africa, as well as follow up interviews held with participants. The study found strong support for sound corporate governance practices at HEIs in South Africa, and also indicates that these institutions are complying with and adhering to this, although room for improvement exists in certain areas. The value added to and contributions to corporate governance effectiveness by student representative council members and institutional forums were also investigated, and it was found that the evolving corporate governance role of the registrar, over and above the traditional academic and student affairs responsibilities, enjoyed much support. Additional reporting responsibilities, in accordance with current corporate governance developments, were identified as areas not meeting expectations.
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Masegare, Peter, and Mpho Ngoepe. "A framework for incorporating implementation indicators of corporate governance for municipalities in South Africa." Corporate Governance: The International Journal of Business in Society 18, no. 4 (August 6, 2018): 581–93. http://dx.doi.org/10.1108/cg-11-2016-0216.
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Purpose This paper aims to develop a framework for incorporating implementation indicators of corporate governance for municipalities in South Africa. In South Africa, there is a corporate governance framework (King III report) that is regarded as a seminal work applicable to both the public and private sectors. Despite its existence, municipalities still struggle to provide services to the citizens due to poor implementation. The poor corporate governance implementation in municipalities led to several issues such as loss of credibility for local government, little interests from investors to invest in municipalities, service delivery protests from communities, maladministration and unexpected change of leadership in municipalities without succession planning in South Africa. Design/methodology/approach The study conducted literature review to demonstrate the need for a framework to implement corporate governance in South Africa. Findings It is evident from the study that the municipal sector could improve its performance and practices of corporate governance, if the underpinning framework is adopted and implemented as a sector framework. The integration of governance elements during the development of the municipal sector integrated development plan (IDP) will facilitate a coherent base for good governance implementation practices. Research limitations/implications This research would go a long way in bringing out the anomalies that paralyse municipalities, the root causes of inefficiency and possible ways to rectify them. Practical implications This study offers a framework that can help the local government sector to improve on service delivery. Implementation of the framework can also assist municipalities in obtaining clean audits from the supreme audit institutions in their respective countries. Social implications The study has a huge social impact as it would help municipal officials take notice of the issues raised and act accordingly thus improving the life of citizenry. Originality/value This study adds value to the existing theoretical and conceptual issues that form the ongoing discourse on the implementation of corporate governance in local government, especially in South Africa, as the country is characteristic by corruption and maladministration.
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Muzata, Tapiwa. "Costs of Corporate Governance Failures: Evidence from South Africa." African Journal of Business and Economic Research 17, no. 3 (September 6, 2022): 145–69. http://dx.doi.org/10.31920/1750-4562/2022/v17n3a7.
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Corporate governance (CG) failures, exemplified by noncompliance with laws, regulations and best practices, have pecuniary costs. Using agency theory, the study aimed to quantify costs of governance failures in South Africa’s FTSE/JSE Top40 listed companies and establish ultimate cost bearer. This differentiates this study from extant literature and makes both methodological and practice contributions by using Value at Risk procedures. Except for Steinhoff, which lost 85% of its value in six weeks, event study method was used to select the other eleven Top40 listed companies included in the study. Data on identified CG failures, published on the Stock Exchange News Service and announced by Regulatory Authorities between 2008 and 2016, was used. At 99.99% confidence level, up to 73.33% of revenue and 62 cents per R1 of market capitalisation were eroded because of governance failures. Due to ascertained losses, the study concluded that CG failures have pecuniary socio-economic costs incurred by principals and government through social expenditure. Theoretical implications suggest agency theory’s extension as agency costs underestimate potential costs by excluding socio-economic costs. The study recommended the use of behavioural theories for insights into agents’ behaviours leading to governance failures and losses. It also recommended that policymakers should strengthen the role of gatekeeping professions to curb the magnitude of ascertained costs.
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Ngwenya, Sam. "Corporate governance and performance of listed commercial banks in South Africa." Corporate Ownership and Control 11, no. 2 (2014): 677–87. http://dx.doi.org/10.22495/cocv11i2c7p1.
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The global financial crisis of 2008 that resulted in the collapse of many financial institutions in the United States (US) and Europe have resulted in debates over the failures of corporate governance structures to properly protect investors. The main objective of the study was to determine the relationship between corporate governance and performance of listed commercial banks in South Africa. The results of the study indicated a statistically positive significant relationship between board size, proportion of non-independent and non-executive directors and bank performance. The results of the rest of the corporate governance indicators are mixed when using different performance measurement variables.
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Marx, Ben. "Corporate governance practices at higher education institutions in South Africa." Journal of Economic and Financial Sciences 1, no. 2 (October 31, 2007): 105–22. http://dx.doi.org/10.4102/jef.v1i2.363.
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South Africa boasts a vibrant higher education sector, with more than a million students enrolled in its higher education institutions. These institutions constitute highly complex organisations, with many and varied stakeholders and with budgets running into hundreds of millions of rands. Sound management and strict adherence to corporate governance principles and practices are essential to the success of these institutions. This will include the establishment of a well-balanced, independent and diligent council, as well as properly constituted and effective sub-committees of council. Of these sub-committees, the audit and finance committees are sure to play a pivotal part in ensuring financial discipline and adherence to sound corporate governance principles and practices. The principal aim of this paper will be to focus on the basic governance-regulatory requirements of higher education institutions in South Africa, and to benchmark these requirements against the corporate governance principles and practices required by King II.
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Rampersad, Renitha. "Corporate social responsibility: Applying sustainability principles in stakeholder engagement." Corporate Ownership and Control 14, no. 2 (2017): 222–29. http://dx.doi.org/10.22495/cocv14i2c1p8.
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There is a strong ethical case to redress poverty and inequality in South Africa. The South African corporate sector has been called upon to take responsibility for the ways their operations impact societies. There has been considerable change in the way the corporate sector concerns themselves with applying sustainability principles to the ways in which they conduct their business specifically in their social interactions with stakeholders. This sees the South African corporate sector investing millions to support sustainable community development and social programs. The total corporate social responsibility (CSR) expenditure in South Africa was estimated to amount to R8.2 billion in 2013/2014 (Trialogue, 2014). Although major South African and multinational companies have had ample opportunity to express and communicate their views on the potential of CSR, the voices of communities continue to be thwarted and stifled when they should logically lie at the heart of effective change management interventions. Business has the obligation, and also the resources, to make a contribution to communities in which they operate. This article investigates the South African business sectors involvement in stakeholder engagement and describes two cases of major South African companies and their increased value for a stakeholder governance model.
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Singh, Gurcharan, Anwar Halari, and William Satoh. "Corporate governance mechanisms and risk-taking in South Africa." International Journal of Business Governance and Ethics 13, no. 4 (2019): 361. http://dx.doi.org/10.1504/ijbge.2019.099568.
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Satoh, William, Gurcharan Singh, and Anwar Halari. "Corporate governance mechanisms and risk-taking in South Africa." International Journal of Business Governance and Ethics 13, no. 4 (2019): 361. http://dx.doi.org/10.1504/ijbge.2019.10021063.
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Loate, Boitumelo, Nirupa Padia, and Warren Maroun. "Acid mine drainage in South Africa: A test of legitimacy theory." Journal of Governance and Regulation 4, no. 2 (2015): 25–40. http://dx.doi.org/10.22495/jgr_v4_i2_p3.
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There is a large body of international literature which suggests that there is a correlation between organisational legitimacy, the nature and extent of non-financial disclosures in corporate reports, and the society’s awareness of social, governance and environmental concerns. Little studied, however, is corporate reporting in South Africa through the lens of legitimacy theory. This paper addresses this gap by exploring whether local mining companies are providing additional environmental information in their annual or integrated reports following media coverage on acid mine drainage and, if so, to what extent. A review of press articles released by the mining houses also reveals how claims to pragmatic, moral and cognitive legitimacy are employed to mitigate negative publicity. In this way, the paper offers additional material on the role of legitimacy theory for explaining developments in corporate reporting. It also contributes to the limited body of interpretive corporate governance research in a South African context.
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Foster, Richard. "The evolution and alignment of institutional shareholder engagement through the King and CRISA reports." Journal of Global Responsibility 11, no. 2 (February 27, 2020): 147–53. http://dx.doi.org/10.1108/jgr-10-2019-0097.
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Purpose The purpose of this study is to provide a high-level review of the evolution of shareholder activism and institutional investor engagement in the corporate governance ecosystem in South Africa. Furthermore, it specifically seeks to explain the incorporation of such aspects into the various key codes and reports on corporate governance in South Africa since 1994. Design/methodology/approach Historical narrative and analysis. Findings This study highlights how shareholder activism and institutional investor engagement in the corporate governance ecosystem have been considered and addressed in South Africa since the publication of the First King Report in 1994. The progress that has been made specifically with regard to the introduction of a code for institutional investors is highlighted. The study ultimately acknowledges that this evolution is a continuing journey on the road to stakeholder inclusivity and engagement, and then concludes that the specific role and impact of institutional investors, particularly given some of the recent corporate governance failures, will require further consideration going forward. This should ensure the continued alignment of all stakeholders and assist in making the necessary improvements to the overarching governance framework and attendant culture. Originality/value This study is a part of a special issue that looks at the contribution of the King reports to governance globally.
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Dorasamy, Nirmala, and Rishi Balkaran. "Inclusivity for ethical public sector governance in South Africa." Corporate Ownership and Control 9, no. 2 (2012): 376–82. http://dx.doi.org/10.22495/cocv9i2c3art7.
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Public sector organisations have moral obligations to a diverse range of stakeholders. The governance of ethics as an integral part of sound governance in the public sector. This necessitates the application of principles of accountability, responsibility, fairness and transparency inclusively to all stakeholders. The South African Constitution of 1996 identifies these core principles as underpinning sound public sector management in a democratic dispensation. The landscape of public sector governance constitutes various control measures to ensure that the interest of all stakeholders is acknowledged. This article focuses on the contribution of inclusive ethics to sound ethical governance in the public sector. While there is no universally accepted best practice of corporate governance, the governance of inclusive ethics in new democratised states like South Africa is vital which embodies a complex system in which individuals, public sector departments and societal characteristics dynamically interact and converge or diverge.
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Cassim, Rehana. "An Analysis of Trends in Shareholder Activism in South Africa." African Journal of International and Comparative Law 30, no. 2 (May 2022): 149–74. http://dx.doi.org/10.3366/ajicl.2022.0402.
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There has been a progressive shift in shareholder activism in South Africa as shareholder demands for greater levels of accountability, reasonable executive remuneration and disclosure and transparency are increasing. Frustration with increasing high-profile corporate scandals and governance failures has also caused shareholder activism to gain momentum in South Africa. This article discusses the South African legal framework relating to shareholder activism and identifies trends in shareholder activism in South Africa. While the growing increase in shareholder activism is welcomed, this article contends that South Africa still has a long way to go compared to the level of shareholder activism in the USA, the UK and Australia. Recommendations are made to enhance shareholder activism in South Africa.
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Sunday, Adeyanju Adebiyi, and Farai Kwenda. "CORPORATE OWNERSHIP STRUCTURE AND FIRM VALUE: EMPIRICAL EVIDENCE OF JSE-LISTED FIRMS, SOUTH AFRICA." EURASIAN JOURNAL OF ECONOMICS AND FINANCE 9, no. 2 (2021): 89–106. http://dx.doi.org/10.15604/ejef.2021.09.02.003.
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This paper examines the relationship between corporate ownership structure and firm value of JSE-listed firms in the phase of the Black Economic Empowerment program in South Africa. Since the end of the apartheid era, corporate governance practices have evolved and the enactment of the BBE Act has altered ownership and control in the South African corporate sector. Using data from 187 firms between 2004 and 2016, we observed that ownership concentration measured by five large shareholders and foreign ownership has a negative impact on firm value proxied with Tobin’s Q and return on assets, while domestic share ownership has a positive relationship with corporate performance. Contrary to the agency theory notion on the role of large shareholders in minimizing losses that arise from the separation of ownership and control and significant foreign investors corporate governance practices in the host countries, the results obtained in this study suggest that local shareholders in the host capital market are important in strengthening corporate governance practices and improve corporate performance. This study contributes to the ownership-firm value relationship literature by offering new evidence on the impact of ownership concentration, foreign ownership, and domestic ownership in an emerging market undergoing transformation through programs addressing its historical inequalities.
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Amodu, Nojeem. "Stakeholder Protection and Corporate Social Responsibility from a Comparative Company Law Perspective: Nigeria and South Africa." Journal of African Law 64, no. 3 (September 17, 2020): 425–49. http://dx.doi.org/10.1017/s0021855320000212.
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AbstractThere have been notable legislative advancements, as well as improvements in corporate governance codes, aimed at protecting stakeholder rights. However, how much protection have they really afforded stakeholders against socially irresponsible corporate behaviour? This article undertakes a comparative analysis of the legal framework underlying South Africa's stakeholder-inclusive approach and Nigeria's environmental, social and governance or sustainability corporate reporting. It identifies a misplaced philosophical background as well as policy misalignment of corporate governance codes and primary corporate law as critical factors that undermine efforts to embed responsible corporate behaviour in order to safeguard the interests of qualified and legitimate stakeholders. It recommends specific amendments to address the ideological defect and align corporate governance codes with primary corporate legislation in these two countries.
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Carels, Candice, Warren Maroun, and Nirupa Padia. "Integrated reporting in the South African mining sector." Corporate Ownership and Control 11, no. 1 (2013): 947–61. http://dx.doi.org/10.22495/cocv11i1c11p6.
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A string of corporate scandals coupled with recent environmental disasters and persistent socio-economic problems has confirmed that traditional financial reporting models are flawed. What is needed is high quality integrated reports dealing with financial and non-financial metrics that communicate clearly the ability of organisations to create and sustain value in the short-, medium- and long-term. This is especially true in the South African mining sector, given its high social and environmental impact, as well as the significant contribution that the sector makes to the South African economy. Accordingly, this paper uses an interpretive text analysis to explore how recent corporate governance developments have impacted the level and extent of integration of environmental, social and ethical-related disclosures in the annual or integrated reports of a sample of mining companies in South Africa. In doing so, the paper contributes to the general body of corporate governance research that has largely neglected African markets and simultaneously offers one of the first formal accounts of the impact of the integrated reporting project on mining houses on the Continent’s largest economy.
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Aigbovo, Omoruyi, and Ikavbo Esther Evbayiro-Osagie. "Corporate Governance Mechanisms and Dividend Payouts of Listed Non-Financial Firms: Evidence from Selected Sub-Saharan African Countries." SRIWIJAYA INTERNATIONAL JOURNAL OF DYNAMIC ECONOMICS AND BUSINESS 6, no. 3 (October 24, 2022): 227. http://dx.doi.org/10.29259/sijdeb.v6i3.227-254.
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This study examined the effects of corporate governance elements on the dividend distribution of listed corporations in the three Sub-Saharan African countries of South Africa, Nigeria, and Kenya. The inquiry used inferential statistics in the form of the system generalized method of moments (GMM). The findings show that corporate governance factors have a fundamental influence on dividend distribution in the three Sub-Saharan African countries. More specifically, board independence has a significant negative influence on dividend payout, but board size, board gender diversity, and management ownership all directly and materially affect the dividend payout of listed non-financial firms. The paper suggested that authorities in charge of regulation in the examined Sub-Sahara Africa nation’s securities exchange have to continually ensure that all firms comply stringently with the codes of corporate governance in other to limit market infractions and boost stakeholders’ confidence and thus stimulate more investment in their respective capital markets.
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Barac, Karen, Ben Marx, and Tankiso Moloi. "Corporate governance practices at South African higher education institutions: An annual report disclosure analysis." Journal of Economic and Financial Sciences 4, no. 2 (October 31, 2011): 317–32. http://dx.doi.org/10.4102/jef.v4i2.323.
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Higher education institutions are presently facing many challenges, ranging from economic and financial constraints to social and educational issues. Accordingly, sound management and governance are essential, and this brings the governance model of HEIs more in line with business corporations. This article provides an overview of the state of governance practices at higher education institutions in South Africa, and an assessment of the corporate governance disclosures in their annual reports. This was done through a literature review of higher education developments, including a South African perspective, supported by empirical evidence obtained from assessing the annual reports of these institutions. The study found that, although most of these institutions are providing disclosure on their corporate governance structures and practices in line with the recommendations of the Higher Education Act and King II, such disclosure is often lacking in detail and could be improved.
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Assan, Thomas E. B., Antoine Mulaba, and Mubanga Mpundu. "Higher learning institution merger and perceived conflict governance strategies." Corporate and Business Strategy Review 1, no. 2 (2020): 26–32. http://dx.doi.org/10.22495/cbsrv1i2art2.
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The Department of Higher Education and Training (DHET), along with the representative body, the Higher Education South Africa (HESA, now known as Universities South Africa), have indicated that South Africa has reached a critical juncture in the governance of higher education, a belated moment of truth – even if it’s precise nature remains to be clarified. The study examined specific variables which include the nature and scope of corporate governance, the factors which influence effective and sustainable corporate governance as well as the strategies to enhance sustainable corporate governance environment in a Merged University. A mixed method was used and data were collected using questionnaire and interview instruments. The sample was made up of 120 randomly selected staff and students. The study found that even though there were positive aspects of the current governance system, the pendulum swayed towards the majority who felt that the governance system in place was not responsive enough and does not communicate as well as embrace all stakeholders. The study showed that as the demand for higher education continues to grow and as governments acknowledge their role in promoting economic development, it becomes increasingly important to ensure higher education systems are managed in an effective way.
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Sibindi, Athenia Bongani. "Corporate governance practices of the insurance industry in South Africa." Corporate Ownership and Control 12, no. 2 (2015): 426–34. http://dx.doi.org/10.22495/cocv12i2c4p2.
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The insurance sector plays a critical role in any economy by its very mechanism of risk transfer and savings mobilisation. It thus performs a critical role in intermediation by fostering the liquidity of the financial markets. This in turn ensures that capital is transferred from surplus units to deficient units of the economy who are in need of funds for the undertaking of capital projects and thereby spurring productivity. In the aftermath of the 2007 to 2009 financial crisis the insurance industry image was tainted. As such, the observance of good corporate governance tenets has now more than ever before become quintessential and also a prescription by regulators. The purpose of this paper is to explore the corporate governance practices (both internal control as well as regulatory measures) that are prevalent in the South African Insurance industry. This paper utilised qualitative research methods and lend itself to document analysis of company reports that the insurance companies submit, as well as the Acts and industry codes that governs the insurance industry in South Africa. The Atlas.ti software was used to analyse the documents. We find evidence that insurers are at various stages of embedding good corporate governance practices. In the aftermath of the financial crisis, the insurance companies by and large have strengthened their internal control systems. They have also complied with regulatory directives and are grappling with the implementation of Treating Customers Fairly (TCF) as well as Solvency Assessment Measurement (SAM) which are market conduct and prudential regulations respectively. Further they also subscribe to the King I, King II and King III frameworks of corporate governance. However we wish to caution against “over regulating” this sector as this could stifle innovation
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Gstraunthaler, Thomas. "Corporate governance in South Africa: the introduction of King III and reporting practices at the JSE alt-x." Corporate Ownership and Control 7, no. 3 (2010): 149–57. http://dx.doi.org/10.22495/cocv7i3p11.
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South Africa has experienced a tremendous growth in its economy since its first free elections in 1994. Politicians, however, consider the transformation of the society and more equally distributed wealth as one of their key goals. Thus, companies often find themselves under scrutiny as regards their contribution. A new corporate governance code (King III) will become effective in March 2010. This reworked code now tries to enhance the reporting practices of companies as to their sustainability and corporate social engagement and tries to link international standards of corporate governance with African values. This paper introduces the novelties of King III and examines the current reporting practices of 68 companies listed on the Alt-X segment of the Johannesburg Stock Exchange. The paper discusses issues like risk, board composition and remuneration and provides valuable insights into the structure of small cap companies in South Africa and analyses which parts are used by companies to enhance their legitimacy.
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Corvino, Antonio, Federica Doni, and Silvio Bianchi Martini. "Corporate Governance, Integrated Reporting and Environmental Disclosure: Evidence from the South African Context." Sustainability 12, no. 12 (June 12, 2020): 4820. http://dx.doi.org/10.3390/su12124820.
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This research aims to investigate how the adoption of King III can affect the corporate governance model of a sample of South African listed companies on the Johannesburg Stock Exchange (JSE). Particularly, we analyzed the influence of sustainability-related issues of the board of directors (BDs) on firm environmental disclosure, after the mandatory preparation of integrated reporting (IR). In addition, we also examined indepth whether some corporate social policies are able to condition the foregoing disclosure. The empirical study covers the period from 2010 (the first-time adoption of IR in South Africa) to 2015 (the earliest year of the release process regarding King Code of Governance Principles for South Africa 2009 (i.e., King III)). Data were collected by the Bloomberg database. With reference to the BDs features, great attention was paid to both business ethics policy and CEO duality. Instead, with regard to corporate social issues, we looked into the adoption of the policies pertaining to health and safety and the respect for human rights. Following the mandatory preparation of IR, our findings show a positive relationship between business ethics policy and firm environmental disclosure. Contrarily, CEO duality does not exert any effect over the earlier type of corporate reporting. Furthermore, empirical evidence substantiates the association between health safety and human rights policies that are very crucial in an emerging economy, such as South Africa, and firm environmental disclosure. The rationale of such results arguably resides in compliance with King III. Therefore, this study can provide interesting insights, given that its mandatory adoption might reveal an important turning point in the development of corporate governance codes, as well as being a “driver” for potential enhancements of firm environmental disclosure, inter alia, in line with the Sustainable Development Goal (SDG) 12.6.
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Bendixen, Mike, and Adèle Thomas. "Perceived qualities of a 'good' chairman: A challenge for corporate governance in South Africa." South African Journal of Business Management 31, no. 2 (June 30, 2000): 65–75. http://dx.doi.org/10.4102/sajbm.v31i2.735.
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Corporate governance is increasingly being viewed as essential to sound business practice. The recommendations of the Cadbury Committee in the United Kingdom will respect to the role of a chairman are similar to those later formulated in the King Report on Corporate Governance in South Africa. In the present study, the perceived qualities of 'good' chairmen are investigated among chairmen, chief executives and main board members in the UK and South Africa. In both the UK and in South Africa the same robust methodology was used, enabling an inter-country comparison of results. The UK study comprised 60 in-depth interviews followed by a mailing of 2418 questionnaires to which 274 main-board members responded. In both cases, in the analysis, four-factor and four-cluster solutions emerged. Not surprisingly, the results for the two countries are quite different from each other and different profiles of preferred chairmen were found. In the case of the UK, the most preferred profile supports the execution of roles recommended for good governance while in South Africa, the least preferred profile appears to be the most appropriate.
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Vaughn, Melinda, and Lori Verstegen Ryan. "Corporate Governance in South Africa: a bellwether for the continent?" Corporate Governance: An International Review 14, no. 5 (September 2006): 504–12. http://dx.doi.org/10.1111/j.1467-8683.2006.00533.x.
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Leong, Shane. "Governance from Below: Contesting Corporate Environmentalism in Durban, South Africa." Social and Environmental Accountability Journal 31, no. 2 (September 2011): 172–73. http://dx.doi.org/10.1080/0969160x.2011.593835.
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Van Alstine, James. "Governance from below: contesting corporate environmentalism in Durban, South Africa." Business Strategy and the Environment 18, no. 2 (February 2009): 108–21. http://dx.doi.org/10.1002/bse.639.
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Fortuin, Marlin, and Patricia Makoni. "Corporate Governance in South Africa: Profit-Sharing and Stakeholder Management." African Journal of Inter/Multidisciplinary Studies 5, no. 1 (2023): 1–16. http://dx.doi.org/10.51415/ajims.v5i1.1067.
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Executive compensation and rewards continue to increase at a higher rate than employee income, incentives, and rewards despite prominent growth in corporate earnings and stock valuations. The aim of this study is to determine whether executive compensation policies are aligned with firm performance, and assess how an employee profit-sharing structure could be implemented to minimise the disparity between firm income growth and the level of employee productivity that contributes to such growth. Three firms listed on the Johannesburg Stock Exchange (JSE) were selected for this study for the financial period 2014 to 2020. Log-linear models are applied to firm efficiency and growth factors. A classification model relating executive compensation to firm risk and performance is presented. Thirdly, a profit-share model is proposed to analyse profit-share impact on compensation ratios and firm cash flow and net profit. No conclusive relationship be-tween executive compensation and financial performance was found for this sample. Profit-share implementation reduces the average employee-executive compensation ratio marginally and has mixed results on inter-firm cash flows and net profits.
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MUZATA, TAPIWA, and GODFREY MAROZVA. "Executive Compensation Schemes: Accelerants of Agency and Corporate Governance Problems in South Africa." African Journal of Governance and Development (AJGD) 11, no. 1.2 (November 3, 2022): 328–50. http://dx.doi.org/10.36369/2616-9045/2022/v11si2a7.
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Executive remuneration has been less analysed and there is need for scrutiny on executive compensation structures and their implications on corporate governance. The study aimed to ascertain the role of executive compensation in accelerating agency and governance problems for FTSE/JSE Top-40 companies from 2008 - 2016. A Generalised Method of Moments was employed, and the results revealed that executive compensation structures can be accelerants of agency and corporate governance problems as the performance was found to negatively affect directors' remuneration. Also, governance had a negative impact on remuneration. Share option trading results confirm agency conflict as net trades and the number of directors that traded on their share options were found to deteriorate with improvement in remuneration. Therefore, it is recommended that the remuneration of executives must be aligned with performance and corporate governance. Moreover, executive directors must exercise their share options after the vesting period and in years they meet predetermined performance targets. Companies should adopt the proposed executive remuneration model in their policies to ensure that executive remuneration considers the governance of the companies they lead. The study's proposed model can be modified in future studies to incorporate other performance matrices such as the six capitals. Keywords: Remuneration Model, Executive Compensation, Governance, Share Options