A corporate governance and business ethics framework: The case study of bank subsidiaries in an emerging country

Ike Phaswana,Theuns Pelser

doi:10.22495/jgrv10i3art3

Abstract

As Africa continues to develop as a foreign direct investment (FDI) destination, greater emphasis must be placed on domestic and international regulations seeking to facilitate governance levels (Awolusi, Adeyeye, & Pelser, 2017, p. 195). This study investigated the degree of compliance to 2016 King IV Report on Corporate Governance™ for South Africa (King IV™) principles and recommended practices by 17 sampled Standard Bank African subsidiaries. An extensive literature review of business ethics and corporate governance was performed, focusing on works from Kretzschmar et al. (2012) and Geach (2009). King IV™ recommended practices were used as constructs to measure the level of compliance. To answer the three research questions and meet the three research objectives, a manual questionnaire approach was employed to collect data from 33 respondents that represented 17 Standard Bank African subsidiaries. Reliability of the constructs in the questionnaire was performed using a Cronbach’s alpha (α) with (α) equals 0.857 indicating a high level of internal consistency for the nominal scales used in the questionnaire. Validity was established through the research design and sequential mixed methods employed. Based on the respondents’ feedback the researchers developed the corporate governance and business ethics framework for Standard Bank African subsidiaries incorporating King IV™. The modes of managing morality (MMM) business ethics model (Rossouw & van Vuuren, 2013, p. 58) was fused into the framework. The researchers are of the view that the framework would assist Standard Bank Group in realising its stated purpose. A set of recommendations that would assist the Standard Bank Group in meeting the prescripts of King IV™ are proffered

Highlights

The consequences of the global financial crisis and corporate scandals have motivated regulators and business communities to be more attentive to corporate governance requirements
This study investigated the degree of compliance to 2016 King IV Report on Corporate GovernanceTM for South Africa (King IVTM) principles and recommended practices by 17 sampled Standard Bank African subsidiaries
The researchers are of the view that the framework would assist Standard Bank Group in realising its stated purpose

Summary

Introduction

The consequences of the global financial crisis and corporate scandals have motivated regulators and business communities to be more attentive to corporate governance requirements. Standard Bank Group and its subsidiaries, including those on the African continent, ―operate in a societal context which they affect and by which they are affected‖ King IVTM explains that this idea of interdependency between organisations and society is supported by the African concept of Ubuntu or Botho (―I am because you are‖; ―you are because we are‖). The former chairperson of Nedbank, one of South Africa‘s Big Four banks, Reuel Khoza, asserts that from an African perspective one cannot have proper management without ethical leadership. Effective leadership is strictly subordinated to ethical leadership because the ultimate responsibility of leadership is to ensure that the organisation is permeated by humanness (Khoza, 2012, p. 1)

Objectives

Results

Conclusion