An analysis of corporate governance in state-owned enterprises (SOEs) in compliance with the King Code principles of good governance
Mbambo, Linda Edward
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Basic values and principles governing public administration is determined by section 195 (10) of the Constitution, 1996 (Act 108 of 1996). These principles require for example, the following: - That professionalism is important; - The resources must be used effectively, efficiently and economically; - Public administration should be executed accountably; and - Information must be transparent and the community must be provided with speedy and quality information. Schedule 1, 2 and 3 of the Public Finance Management Act, 1999 (Act 1 of 1999) provides lists of the various types of SOEs in South Africa. Recent incidents, media reports, and new developments within the three major strategic SOEs – namely the South African Broadcasting Corporation (SABC), the Electricity Supply Commission (Eskom), and South African Airways (SAA) – raise alarm. Furthermore, these SOEs need to be examined to determine whether they comply with business ethics, management principles, and guidelines provided by the King Codes. The study decribed the contextualisation of the three major strategic SOEs, namely the SABC, SAA, and Eskom, and their strategic role as chief elements that convey social merchandise and ventures to guarantee personal satisfaction for every single South African. The study highlighted the broader purpose/aim of the research, which was to analyse corporate governance compliance with the King Codes of good corporate governance at Eskom, the SABC, and SAA. This study also aimed to establish whether the board of directors of these three major strategic SOEs comply or do not comply with the King III and IV codes and their principles of good governance. The governance oversight role of the South African National Treasury, parliamentarians, and the Department of Public Enterprises (DPE) that promotes good and sound governance in SOEs was therefore examined. Furthermore, this study also sought to determine the main barriers to the successful implementation of legislative measures with reference to the Public Finance Management Act (PFMA) and to explore the role of the board of directors as a legal structure that governs SOEs and their fiduciary duties. The robust debate surrounding the dark clouds over board members, leadership, ethics, morals, corruption, state resources looting, and instability in the SABC, SAA, and Eskom were investigated.