Corporate governance practices in a Parastatal: A case study of Zambia railways limited

Abstract

The topic of corporate governance in firms and organisations has become a matter of serious concern among shareholders, regulators, and society. This study sought to assess the corporate governance practices of Zambian parastatals through a case study of Zambia Railways Limited (ZRL). The objectives of the study were to determine compliance with good corporate governance in terms of board structure and functions at the ZRL, to investigate challenges faced by ZRL in implementing good corporate governance practices and to explain the impact of ZRL's corporate governance structure on its operations. The study followed the mixed-method approach where data was collected using questionnaires and in-depth and semi-structured interviews. The case-study research design was employed. A convenient sample of 40 was employed. The study revealed that ZRL has a unitary board structure that is common in the Anglo-American model. The main challenges to good corporate governance include lack of internal controls, excessive political interference and lack of clear roles. The study further found that poor corporate governance negatively impacts operations. The study recommended for a very clear separation of the roles of shareholders and board of directors. The study also recommended for a clear legal framework. Besides, the research indicated the need for future research to investigate the role of Industrial Development Corporation (IDC) in the companies under its portfolio.