An exploration of corporate governance and performance of a state-owned enterprise: case of Eskom.
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Date
2016
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Abstract
The objectives of the study were to determine elements of corporate governance that impact on performance at Eskom; to evaluate the corporate governance process at Eskom and to establish governance factors that limit performance at Eskom. The data collection instrument used was the self-administered questionnaire, which was targeted at the board of directors, the shareholder and the executive management of Eskom. In-depth interviews were also conducted targeting the executive management. The research applied both qualitative and quantitative methods. The estimations and data analysis were done using the IBM 22 SPSS statistical software. The main tests that were used in the current study are the frequency tables and the one-way ANOVA test. The reliability and validity of the questionnaire/ instrument was tested using the Cronbach’s Alpha coefficient. The quantitative data collected was organized and summarized using descriptive statistical methods such as averages, tables and percentages. In addition, qualitative data was interpreted and directly linked to the relevant research questions. The results obtained were compared with what theory says and some appropriate recommendations were made.
The findings reveal that while the board of directors of Eskom accepts the recommendations made by the executive management, it, however, does not implement them. The Eskom shareholders were found to be lacking commitment in the governance processes and the overall running of the business of Eskom. The study also found out that both insider and outside ownership including direct ownership matter for economic performance. It also found out that greater transparency and disclosure leads to a widened investor base and flexible access to capital. The study recommends the revamping of the whole corporate governance process and the recalibration of the balance of power, improving the structure and size of its board of directors as well as to improving the timely disclosure of company information especially financial reports.
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Master’s Degree. University of KwaZulu-Natal, Durban.