Feasibility of Implementation of Public Entity Corporate Governance Act's Best Practices to Enhance Good Performance in a State-Owned Enterprise

Adegbola Otekunrin,Kudzanai Matowanyika,Stella Ibitoye,Ngoni Doma,Clever Fungai Munyoro

doi:10.13189/ujaf.2022.100101

Abstract

This study examined the feasibility of implementing the Public Entity Corporate Governance Act's (PECGA) best practices to enhance good performance at a State Owned Entity (SOE). Boards of State enterprises and parastatals (SEPs) had encountered impediments in promoting corporate governance best practices in Africa. Identified factors hindering the implementation of PECGA of 2018 were examined to proffer recommendation for its adoption. Zimbabwe came up with the PECGA of 2018. The feasibility of implementing PECGA's best practices to enhance good performance at the SOE is not well known when this study was conducted. Mixture research methods were adopted where questionnaires were used to collect data. Purposive sampling methods were used to examine the populations of 38 head office managerial staff. Chi-square and regression analysis were used for analysis. It is found that job title and education level are related and the execution of sound PECGA best practices and the SOE's operational performance are related. The results confirmed that there were hindrances on the execution of sound PECGA best practices on the SOE's operational performance. The study concluded that it is not feasible to fully implement the PECGA best practices in SEPs to enhance performance in Zimbabwe. The Zimbabwean's PECGA must be moved from the

Highlights

Corporate governance (CG) failures are very topical these days in both the private and public sector [49]
On the Global stage, Moyo [35] mentions that corporate scandals which consisted of big companies such as Enron, WorldCom, Feasibility of Implementation of Public Entity Corporate Governance Act's Best Practices to Enhance Good Performance in a State-Owned Enterprise
This study examined if the execution of sound corporate governance Public Entity Corporate Governance Act (PECGA) best practices and the State Owned Entity (SOE)'s operational performance are related

Summary

Introduction

Corporate governance (CG) failures are very topical these days in both the private and public sector [49]. On the Global stage, Moyo [35] mentions that corporate scandals which consisted of big companies such as Enron, WorldCom, Tyco, and Parmalat have called for new height in corporate governance management. The country has had its fair share of scandals and corporate failures, such as African Renaissance (AFRE), Zimbabwe Broadcasting Corporation, Public Service Medical Aid and Zimbabwe Iron and Steel Company (ZISCO), [50]. The most topical was the PSMAS saga, where the CEO earned an “outrageous" salary and allowanced up to US$500 000 per month, shockingly this was done with the approval of the board which was not conscious of the effects as the company was failing to honour debts owed for services rendered to its members [35]

Methods

Findings

Discussion

Conclusion