Johannesburg Securities Exchange Research Articles

Corporate tax avoidance: Is South African society negatively affected by chartered accountant CEOs?

Corporate tax avoidance can impede governments’ spending towards social and economic initiatives that can increase infrastructure development, economic growth, and equality, and reduce poverty. Yet, why some companies avoid more tax than others is not adequately understood, and, in particular, research regarding the influence of CEO-characteristics on tax avoidance, is lacking. This study is an empirical investigation into the influence of a CEO’s tax knowledge and tax awareness, construed as a ‘CEO effect’, on corporate tax avoidance, using data from the 112 largest listed companies on the Johannesburg Securities Exchange between 2004 and 2018. We found that the CEO effect, not measured before, does not have an observable influence on the level of corporate tax avoidance. This finding assuages possible concerns that chartered accountants, and particularly chartered accountants in the top leadership positions in large companies, are more shareholder oriented, to the detriment of the interests of society, as suggested in the literature. Significance: Our findings suggest less influence of the CEO, as an upper-echelon member, on companies’ behaviour, such as corporate tax avoidance, than other published studies have found. Moreover, the findings indicate that the tax knowledge and awareness construed as a CEO effect, does not influence corporate tax avoidance. In the main, the results provide little support for claims made by the South African Institute of Chartered Accountants, the chartered accountant’s regulatory body, that chartered accountants can help companies to avoid tax to increase profits. This may sway society’s view of the chartered accountant and their role in the South African economy.

Saving the environment with indigenous directors: Evidence from Africa

AbstractWe build on and extend the literature on corporate governance and sustainability by examining whether indigenous directors (IDs, hereinafter) shape corporate environmental performance (CEP, hereinafter). Drawing insights from image motivation, resource dependence, and critical mass theories, we develop models that link IDs with CEP. Analyzing 1,372 firm‐year observations extracted from firms listed on the Johannesburg Securities Exchange (JSE, hereinafter), for the period spanning from 2015 to 2021, we provide robust evidence that IDs are positively associated with a firm's environmental performance and the association is driven primarily by non‐executive and female IDs. In additional analyses, we demonstrate that a token appointment of IDs to a firm's board would not have an impact on CEP, while the appointment of a “critical mass” of IDs promotes CEP. We also find that a higher percentage of IDs on a firm's board increases corporate financial performance (CFP, hereinafter) and reinforces the positive impact of CEP on CFP. Our findings suggest that appointing a higher proportion of IDs to a firm's board promotes both the financial as well as the environmental performance of the firm. Thus, companies could exploit the virtues of especially non‐executive and female IDs to promote corporate environmental sustainability.

DISCONTINUITIES IN EARNINGS DISTRIBUTIONS: EVIDENCE FROM SOUTH AFRICA

There is increasing evidence that earnings management amongst firms creates discontinuity in the earnings distribution. We have verified the evidence of discontinuity in earnings distribution for 246 Johannesburg Securities Exchange listed firms from 2003 to 2018. The assets-scaled income was used as earnings measure to present the empirical histograms; the standardized difference test of significance was utilized to establish the existence of discontinuities at zero. The result shows discontinuities in distributions for earnings level and earnings-change. In addition, except for the unscaled earnings, the evidence supposes that the sample design does not explain the discontinuity in the earnings (earnings change) distributions.

The impact of COVID-19 on company performance per industry sector: Evidence from South Africa

Orientation: Governments across the world have adopted a variety of preventative measures to curb the spread of the coronavirus disease 2019 (COVID-19). The full socioeconomic costs present a significant threat to economic growth, with developing economies such as South Africa predicted to be the worst affected.Research purpose: This study assessed the impact of COVID-19 on company performance based on the various industry sectors of the Johannesburg Securities Exchange (JSE) of South Africa.Motivation for the study: The study builds on the growing body of knowledge on the impact of COVID-19 on company performance in a South African context.Research approach and method: All JSE-listed companies were analysed for the period 2014–2020. Descriptive statistics and regression analyses were applied to assess the impact of COVID-19 on company performance per industry sector and to identify the mechanisms through which company performance was affected during the pandemic year.Main findings: Company performance per JSE industry sector suffered a significant negative impact during the 2020 pandemic year. Sectors were affected differently owing to the idiosyncratic nature of each industry. Cash-flow-related variables significantly affected company performance during the pandemic year.Practical implications: A healthy cash flow is paramount in times of crisis. Investors and other stakeholders should be cognisant of how industry sector idiosyncrasies affect company performance during crises.Contribution: Results may provide insights into the effect of COVID-19 on company performance per industry sector in South Africa, to support the mitigation of the negative consequences of COVID-19 and future crises or pandemics.

Integrated report content evolution: A case study of the Johannesburg Securities Exchange food and drug retail sector

Background: Since the release of the King III report in 2009, and the adoption of these principles in the Johannesburg Securities Exchange (JSE) listing requirements, there has been a surge in integrated reporting guidelines, including the release of the International Integrated Reporting Council (IIRC) framework and Global Reporting Initiative (GRI) sustainability reporting standards, with an updated code for corporate governance, King IV, subsequently being published. These introductions have simulated a growth in research on integrated reporting; however, the impact of these initiatives on the annual integrated report (AIR) composition or format has not been explored.Aim: The objective of this article is to examine, compare and contrast identified trends in the composition of published AIRs following the release of the aforementioned guidelines.Setting: JSE-listed companies in the food and drug retail sector were analysed from 2009 to 2018.Methods: The study applied both qualitative and quantitative content analysis techniques to analyse the composition of AIRs.Results: The composition of AIRs of companies within the given sector and timespan has shifted, shown through a decrease in the number of pages containing annual financial statements and an increase in governance, strategy and sustainability information. Annual integrated reports have moved to explaining financial results with reference to full financial statements published online, with the other identified shifts coinciding closely with the release of integrated reporting developments. These results suggest that there has been an uptake in application of new reporting initiatives.Contribution: The article revealed that new reporting guidelines had been applied, generating a change in the composition of AIRs over the years, contributing to the body of knowledge on the reporting of economic, environmental and social perspectives.Conclusion: A comprehensive foundational study has been created that has illustrated that AIRs have developed in relation to new reporting initiatives.

Managerial ownership, board gender diversity, occupational health, and safety risk management in an emerging economy

The prevalence of occupational health and safety (OHS) risks among mining firms points to inadequate corporate governance (CG) mechanisms (Baxter, 2016). The purpose of this study is to bridge the existing research gap by examining the impact of women on corporate boards and managerial ownership (MO) on occupational health safety risk management performance incorporating firm size moderating variables panel data from the Johannesburg Securities Exchange (JSE) of thirty (30) purposively sampled mining firms for the period 2002–2018. To the best of our knowledge, the study is one of the first pragmatic investigations of the impact of women on corporate boards, and managerial ownership on OHS risk management performance in the South African mining sector. A multivariate regression analysis based on quantitative secondary panel data confirmed a positive impact of managerial ownership, and board gender diversity on the OHS risk management performance of mining firms in South Africa. The study has practical implications for the existing body of knowledge, academics, regulators as well as mining firms’ corporate governance bodies in South Africa, which recommend that current regulatory bodies need to implement effective and sound strategies that may considerably improve the mitigation of OHS risks to attain the “zero harm” milestone by December 2024.

Integrated report content evolution: A case study of the Johannesburg Securities Exchange food and drug retail sector

Background: Since the release of the King III report in 2009, and the adoption of these principles in the Johannesburg Securities Exchange (JSE) listing requirements, there has been a surge in integrated reporting guidelines, including the release of the International Integrated Reporting Council (IIRC) framework and Global Reporting Initiative (GRI) sustainability reporting standards, with an updated code for corporate governance, King IV, subsequently being published. These introductions have simulated a growth in research on integrated reporting; however, the impact of these initiatives on the annual integrated report (AIR) composition or format has not been explored. Aim: The objective of this article is to examine, compare and contrast identified trends in the composition of published AIRs following the release of the aforementioned guidelines. Setting: JSE-listed companies in the food and drug retail sector were analysed from 2009 to 2018. Methods: The study applied both qualitative and quantitative content analysis techniques to analyse the composition of AIRs. Results: The composition of AIRs of companies within the given sector and timespan has shifted, shown through a decrease in the number of pages containing annual financial statements and an increase in governance, strategy and sustainability information. Annual integrated reports have moved to explaining financial results with reference to full financial statements published online, with the other identified shifts coinciding closely with the release of integrated reporting developments. These results suggest that there has been an uptake in application of new reporting initiatives. Contribution: The article revealed that new reporting guidelines had been applied, generating a change in the composition of AIRs over the years, contributing to the body of knowledge on the reporting of economic, environmental and social perspectives. Conclusion: A comprehensive foundational study has been created that has illustrated that AIRs have developed in relation to new reporting initiatives.

Monetary policy and long-run share price reversals on the Johannesburg Securities Exchange

Purpose: The study expounds on the phenomenon of long-run reversal and monetary policy in the financial markets. The study used Johannesburg Securities Exchange (JSE) data to determine whether the monetary policy changes implemented by the South African Reserve Bank impact long-run reversals in the JSE. Context: Long-run share value reversals have occurred in various regional financial markets in the US, Europe, Asia, and South Africa. Long-run share value reversals occur when firms with poor past performance rebound and produce superior returns compared to firms with good historical past performance. South Africa has a monetary policy of inflation targeting, leading to upward lending rate adjustments whenever consumer inflation threatens to exceed 6%. Methods: The regressions of the Fama-French three factors model and Fama-MacBeth model were used to estimate the relationship between the excess return of different portfolio returns and the Fama-French three factors. Furthermore, we split our sample under expansive and restrictive monetary conditions. We ran the regression of the Fama-MacBeth model again to see whether the monetary conditions will influence the long-run share price reversal. Results: The sample results over the near 15-year sample period showed that firms with poor past performance failed to outperform those with past solid performance. The gap is closed under restrictive monetary conditions that tighten the liquidity conditions of an economy. In addition, monetary policy changes led to long-run reversals among poor performing firms. Practical value: The study contributes to momentum theory. It is recommended that further research do a detailed examination of the relationship between firm characteristics and long-run reversals under various monetary conditions. Monetary conditions are worth watching for when constituting a portfolio because they create arbitrage opportunities for astute investors.

The impact of monetary policy on long-run share price reversals on the Johannesburg Securities Exchange

Purpose: The study expands on the phenomenon of long-run reversal in the financial markets using Johannesburg Stock Exchange (JSE) data. This study aimed to determine whether the monetary policy changes implemented by the South African Reserve Bank influence long-run reversals in the JSE. Context: Long-run reversals have occurred in various global financial markets in the US, Europe, Asia, and South Africa. Long-run reversals occur when firms with poor past performance rebound and produce superior returns to firms with good historical past performance. South Africa has a monetary policy of inflation targeting. It tends to increase interest rates whenever the change in the consumer price index falls above the upper limit of the range of 3–6%. Methods: The regressions of the Fama-French three factors model and the Fama-MacBeth model were used to estimate the relationship between the excess return of different portfolio returns and the Fama-French three factors. Furthermore, we split our sample under expansive and restrictive monetary conditions. We ran the regression of the Fama-MacBeth model again to see whether the monetary conditions influence the long-run reversal. Results: The sample results over the near 15-year sample period show that firms with poor past performance failed to outperform those with past solid performance. In addition, monetary policy changes did not lead to long-run reversals among poor performing firms. The gap is closed under restrictive monetary conditions. Practical value: The study recommends that one could do a detailed examination of the relationship between firm characteristics and long-run reversals under various monetary conditions. Monetary conditions are worth watching for when constituting a portfolio because they create arbitrage opportunities for astute investors.

Management’s Fiduciary Responsibility Towards IT Governance In The Context Of The King III Code Of Corporate Governance In South Africa

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. 

Strategic stakeholder management: investor relations in South Africa

PurposeThe study explores the use of professional investor relations (IR) practices in South African (SA) listed companies to understand which theories may be responsible for IR's adoption and growth in South Africa, an emerging economy. Therefore, this study evaluates shareholder value maximisation, stakeholder and legitimization theory and institutional isomorphism theory as possible theories to explain professional IR behaviour in SA listed companies.Design/methodology/approachThe study design is qualitative and exploratory, based on a questionnaire developed and sent to all companies listed on the Johannesburg Securities Exchange (JSE).FindingsThe results indicate evidence of isomorphic spread to SA environments from practices observed in the UK and the USA, which we find are mostly performed to promote shareholder interests. The data suggest some evidence that the communication needs of black economic empowerment and environmental, social and governance (ESG) investors are given priority, suggesting the utility of professional IR to obtain legitimisation from society. Contrary to expectation is that social media communication channels are not extensively used.Practical implicationsThe descriptive nature of this study may be valuable to IR practitioners to improve SA IR practises, while neglected legitimisation opportunities with regard to the needs of ESG and black economic empowerment shareholders may be fruitfully addressed by practitioners.Originality/valueThis study innovates in its use of legitimisation theory and isomorphism theory to develop the study's expectations. Social problems provide contextual elements unique to SA which provides a good opportunity to test the expectation of legitimisation theory's influence on professional IR practices.

Corporate carbon risk, voluntary disclosure and debt maturity

PurposeThis study aims to investigate the association between corporate carbon risk and debt maturity and the moderating role of voluntary disclosure, within the context of South Africa, an emerging player in the climate policy debate.Design/methodology/approachBased on the insights drawn from agency as well as information asymmetry theories, the authors develop models that link debt maturity with corporate carbon risk and voluntary disclosure and examine data obtained from companies listed on the Johannesburg Securities Exchange (JSE), for the period 2011-2015.FindingsThe findings document that, other things being equal, debt maturity is significantly higher, both statistically and economically, for companies with lower carbon intensity (risk). In addition, high-quality carbon disclosure accentuates the positive association between debt maturity and the inverse of carbon intensity. The results are robust to alternative measures of corporate carbon risk and issues of endogeneity. The findings are consistent with the view that lenders in South Africa use debt maturity as a non-price mechanism to address borrower risk and grant lower carbon risk companies that voluntarily provide higher quality carbon disclosures an even higher access to longer maturity debts; JSE-listed companies could use voluntary carbon disclosure to ease their access to debt with longer maturity.Practical implicationsThe findings of this study have important implications to borrowers, pressure groups, policymakers and other stakeholders.Originality/valueTo the best of the authors’ knowledge, this study is the first to document evidence suggesting that lenders in South Africa use debt maturity as a non-price mechanism to address borrower risk.

Corporate real estate and corporate strategy alignment in South Africa

PurposeThis paper aims to discuss whether alignment between corporate real estate strategy and corporate strategy exists for non-property companies listed on the Johannesburg Securities Exchange and what effects alignment has on the firms’ financial performance.Design/methodology/approachThe study was both qualitative and quantitative in nature, with a specific focus on non-property firms listed on the Johannesburg Securities Exchange. The qualitative part of the study involved the analysis of the firms’ annual reports to determine the presence and use of corporate real estate strategies and their alignment to corporate strategy and the extraction of financial indicator data. The quantitative portion of the study involved the use of multivariate analysis, to distinguish and quantify the relationship, if any, between corporate real estate strategy and the identified financial performance indicators. The independent variables were the CRE strategies employed and the dependent variable was the share price. The methods used in this study have been applied before in European and Asian studies; this assisted in ensuring that validity and reliability was achieved.FindingsThe study finds that the most used strategy by firms (47%) is that which facilitates production, operation and service delivery. The Consumer Goods, Healthcare and Telecommunications sectors appear to demonstrate the highest level of alignment. Return on Shareholder Funds has a strong significant positive correlation with share price. Flexibility as a corporate real estate strategy also has a significant positive coefficient, which indicates a positive relationship with share price.Research limitations/implicationsAlthough consistent with results of studies conducted in Europe and Asia, the results of this research may not be applicable to privately held non-listed firms, state-owned enterprises, non-profits and educational institutions. This study also ignores the dynamic external environment in which firms operate and the necessity of firms adjusting their corporate real estate strategy to their changing business strategy.Practical implicationsThese results suggest that the incorporation of corporate real estate strategy in the firms’ corporate strategy formulation has the potential to enhance shareholder value for South African firms. Real estate developers, landlords and owner occupiers would benefit from better understanding the strategic requirements of corporations to ensure that the solutions they provide increase the likelihood of maximizing shareholder return.Originality/valueThe role of corporate real estate strategy in the firms’ corporate strategy formulation has the ability to enhance shareholder value. This research adds to the scant literature on corporate real estate management in South Africa.

Is integrated reporting associated with corporate financing decisions? Some empirical evidence

PurposeThe emerging practice of integrated reporting (IR) has raised curiosity regarding how it impacts on firms and their stakeholders. The purpose of this paper is to examine whether a firm’s decision to provide integrated reports is associated with its financing decisions and whether financial reporting quality mediates the relationship.Design/methodology/approachA usable sample of 832 firm-year observations was employed based on a dataset drawn from companies listed on the Johannesburg Securities Exchange (JSE) for the period between 2009 and 2015.FindingsThe findings show that firms that provide integrated reports tend to have lower levels of leverage, and this effect is partially mediated through financial reporting quality. We further document that the partial effect of financial reporting quality on leverage is stronger for firms that provide integrated reports than is the case for other firms. The findings suggest that IR enables firms to employ equity financing, which is a more informationally-sensitive source of capital than debt financing.Originality/valueThis study is the first to document evidence suggesting that management can draw on IR in devising optimal financing strategy.

Stock market performance and cross-border mergers and acquisitions in South Africa

Purpose Since the attainment of fully fledged democracy in 1994, South Africa witnessed a substantial increase in both the number and the value of completed mergers and acquisitions (M&As) targeting South African firms. In spite of this development, studies on foreign direct investment (FDI) on South Africa have not looked at determinants of entry-mode choice of FDI such as M&A. The purpose of this paper is to fill the gap in the literature by investigating locational factors that make South Africa an attractive destination for M&A activity in Africa. Design/methodology/approach The authors analyse both the number and the value of M&As, the dependent variable. They analyse the number of firms acquired each quarter in South Africa from 1991 to 2014 using a count model – the negative binomial model. They then compare the results for this model with those of benchmark models such as the normal count and the Poisson count models. In this paper, the authors test for stationarity of the time series using the Augmented Dickey–Fuller (ADF) and the Kwiatkowski–Phillips–Schmidt–Shin (KPSS) tests. They examine the long-run relationship between the value of M&As and the selected macroeconomic variables using Johansen’s co-integration technique. Findings This paper finds that both the number and the value of M&As in South Africa are positively influenced by the performance of the Johannesburg Securities Exchange during the period 1991 to 2014. This result confirmed the expectations hypothesis that stock markets facilitate M&A activity. The authors also observed that other financial and macroeconomic variables – exchange rate volatility, relative inflation rate and economic growth – are important locational factors for M&A activity. Among these factors, the exchange rate volatility exerts the greatest influence on M&As. The rate of growth of gross domestic product (GDP) matters for M&A activity in emerging market economies such as South Africa. Research limitations/implications The data for the number of M&As are more complete than that of values. This is because some firms choose not to report the value of deals after a transaction takes place, resulting in missing data for the value of M&A deals. Practical implications This paper shows the important role played by pull factors on the direction of capital flows in the long run. It is recommended that policy-makers should further strengthen and improve the efficiency of domestic financial markets. Stable and reliable monetary policy framework that maintains low levels of inflation and mitigates the volatility of exchange rate is important for FDI and M&A flows to emerging market economies. There is a need to put the necessary measures in place to improve South Africa's economic growth rate, which has been weak since the global financial crisis of 2008. Originality/value Most academic literature has examined determinants of aggregate FDI without consideration of entry-mode choice. This paper focused on the M&A entry-mode for an emerging market economy. The authors show that equity markets play a key role in facilitating M&A activity. The expectations hypothesis by Nelson (1959) that stock markets facilitate M&A activity is confirmed in this way for South Africa.

Is the Alternative Exchange achieving its objectives? A capital structure perspective

Orientation: Despite their significant contribution to the South African economy, the majority of small and medium enterprises (SMEs) fail because of lack of access to appropriate types of capital. The Alternative Exchange (AltX) was established to address the lack of access to equity finance for SMEs. Research purpose: This study aims to determine whether the AltX has adequately enabled access to equity finance for the firms listed thereon. Motivation for the study: This study was motivated by the apparent lack of SME access to appropriate forms of finance. By evaluating the effectiveness of the AltX, the study seeks to investigate whether further measures are required to enable access to equity finance for SMEs. Research design, approach and method: A quantitative methodology was employed and panel regression models were used to compare the levels of equity and debt of firms listed on the AltX to those listed on the Johannesburg Securities Exchange’s (JSE) main board. In this manner, the study aims to determine whether AltX firms enjoy the same level of access to capital markets as their counterparts on the JSE. Main findings: The findings indicate that firms listed on the AltX have significantly higher levels of debt than those listed on the JSE’s main board. This debt tends to be the more accessible yet risky short-term debt. Practical/managerial implications: The findings infer that despite the establishment of the AltX, SMEs still face considerable constraints to accessing equity finance and, as such, may be compelled to consider other means of raising finance. Contribution/value-add: This study contributes to the research on SMEs in South Africa and suggests that further interventions are required to enable their access to appropriate forms of finance.

The Fama-French five-factor model: Evidence from the Johannesburg Stock Exchange

ABSTRACTThis study tests the effectiveness of the Fama and French (2015) five-factor model in explaining returns on the Johannesburg Securities Exchange (JSE). The five-factor model is compared to the traditional Fama-French three-factor model as well as other factor combinations. The results show that the size-value and size-profitability three-factor models best describe time-series returns when comparing models. The five-factor model best explains the cross-section of returns and, overall, the results identify a significant inverse size premium and negative relationship between beta and returns but find a significant value premium. The additional factors of profitability and investment contribute to explaining the returns on the JSE; however, profitability is more consistent than investment.

The effect of remuneration committees, directors’ shareholding and institutional ownership on the remuneration of directors in the top 100 companies in South Africa

Executive directors’ remuneration of leading South African companies often attracts the attention of the press, shareholders and unions. The research on which this article is based investigated whether executive directors’ remuneration of the Top 100 companies listed on the Johannesburg Securities Exchange (JSE) is influenced by the implementation of certain corrective corporate governance measures. The remuneration of executive directors was regressed on a number of firm and corporate governance characteristics to determine whether these characteristics have an influence on executive directors ’remuneration. It was found that corporate governance reforms relating to institutional ownership, the number of non-executive directors on the remuneration committee, shareholder voting on the remuneration policy and the number of remuneration committee meetings act as an effective governance tool to protect shareholders’ interests with regard to some of the elements of executive directors’ remuneration.

Corporate carbon risk, voluntary disclosure, and cost of capital: South African evidence

AbstractThe study examines the interplay among corporate carbon risk, voluntary disclosure, and cost of capital within the context of South Africa, a “rising power” in the climate policy debate. We develop a system of simultaneous equations models and analyze data drawn from firms traded on the Johannesburg Securities Exchange (JSE), for the period 2010 to 2015, using the three‐stage least squares procedure. We find that voluntary carbon disclosure is associated with lower overall (and equity) cost of capital, after controlling for corporate carbon risk. We also find that firms with higher carbon risk tend to provide better quality carbon disclosure and signal the possibility of high carbon risk to avoid negative market reactions resulting from concealing carbon information. Although the capital market does not appear to incorporate individual firm's carbon risk exposure into the required cost of capital, we find that it generally requires higher returns for companies operating in carbon‐intensive sectors. These findings suggest that firms could exploit the virtues of voluntary carbon disclosure to reduce their overall (and equity) cost of capital. Our findings also imply that regulators and policymakers could point to the cost of capital reducing role of voluntary disclosure to lure firms into voluntarily providing superior quality carbon disclosures.

Critical Success Factors That Influence Black Leadership Integration in Companies Listed on the Johannesburg Securities Exchange

In the context of post-apartheid period, there have been certain measures introduced to have employment equity in South Africa. The integration of black leadership in a white dominant companies was one among them. The purpose of this study is to identify the critical success factors that influence black leadership integration as per the reform measures defined after post-apartheid period in South Africa. The overall research question guiding this study is: What are the critical success factors that influence black leadership integration in companies listed on the Johannesburg Securities Exchange? The quantitative correlation research design utilizes a pre-validated survey to access the success factors that influence black leadership integration. To address the research question, the independent variables – corporate culture, leadership style, diversity and strategic leadership behaviours – were correlated with three dependent variables - tenure (years of service), job satisfaction and growth satisfaction (career development opportunities) as measures of successful leadership integration. The study finds statistically significant relationships amongst many of the 32 constructs identified in the literature which using factor analysis are described as fair treatment, job hopping, commitment to transformation, Black entrepreneurship and corporate culture. As defined by Black management, job satisfaction, career development (dependent variables), fair treatment and specific leaders behaviours (inspirational motivation and idealised attributes) (independent variables) as defined by MLQ 5X leadership survey are critical success measures that could influence Black leadership integration in Johannesburg Securities Exchange (JSE) listed companies. The results of this study provide strong evidence of critical success factors that have a statistically significant influence on successful Black leadership integration into historically White dominated South African companies.