A comparative study on specific governance elements in the state-owned entities overseen by the Department of Public Enterprises (DPE) and the Department of Transport (DOT) in South Africa
Thesis (MBA)--Stellenbosch University, 2014.
The aim of this research assignment was to analyse and compare the specific governance elements in SOEs in the two government departments. A sample of twenty state-owned entities (SOEs) was selected in total, twelve from the Department of Transport and eight from the Department of Public Enterprises. The literature review on corporate governance in general and in South Africa illustrated the importance of corporate governance in any company. A short summary of the origin of governance is followed by a discussion of corporate governance from an SOE’s perspective. The study highlighted that the board of the entity under discussion was critical in a discussion of corporate governance. The focus, therefore, shifted to the role and responsibilities of boards and the individual members. The size, composition, diversity, remuneration and meeting attendance are the important elements that were analysed as the basis of the research. All the data for the analyses were sourced from the publicly available company annual reports for the 2012/2013 financial year of all the SOEs. Based on the analysis of the research findings carried out in Chapter 4, the following conclusion was reached with regard to governance in SOEs in the DOT and the DPE: - In the opinion of the author, governance elements of independence, ethnic diversity, average age and board meeting attendance compare evenly with each other. - The CEO position on boards from both departments is still male dominated. - There were clear differences with regard to gender diversity and the remuneration of CEOs and chairpersons. In this case, the DPE displayed higher figured in both elements. - There is a strong correlation between CEO remuneration and chairperson fee amongst both departments’ SOEs. CEO remuneration and total assets per SOE also correlate well. This, in the author’s opinion, explains the higher salaries of CEOs and chairpersons at SOEs responsible for import strategic infrastructure like Transport and Energy.