Abstract
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.
Highlights
The study of corporate governance within the context of political and economic factors is a recent phenomenon, and because the political and economic landscape of South Africa has changed dramatically since 1994, the political and economic determinants of corporate governance reform in South Africa are both currently still poorly described and poorly understood.This study provides a deeper understaning of the drivers behind the corporate governance reform process in South Africa by identifying the various economic actors involved and exploring their corporate governance preferences.Webster and Adler (1999) describe South Africa's transition as a class compromise reached between collective actors
Over the last 14 years, South African corporate governance reform has displayed a fascinating relationship between international factors and domestic political realities
The catalyst for this reform has been the recognition that South Africa is a developing economy, and as such, there is a particular need for South African companies to be more competitive in the international arena
Summary
This study provides a deeper understaning of the drivers behind the corporate governance reform process in South Africa by identifying the various economic actors involved and exploring their corporate governance preferences. Webster and Adler (1999) describe South Africa's transition as a class compromise reached between collective actors They argue that a political compromise was reached between these political actors in 1994, adding that a second economic compromise would have to be reached. They claim that the alternatives to such a compromise are a continued economic stalemate between the current social, political and economic forces in South Africa, increased disorder and even a descent into decentralised collective violence in South African society. This study attempts to provide a deeper understanding of the reasons why such a “political compromise” occurred and its resultant impact on corporate governance reform
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