Corporate Governance And The Performance Of State-Owned Enterprises Zimbabwe

Abstract

The article is based on a study that focused on corporate governance and its influence on the performance of state-owned enterprises (SOEs) in Zimbabwe. Such SOEs have been at the centre of controversy in recent Auditor General Reports. The study sought to determine the influence of board size on organisational performance, to measure the effect of board composition on organisational performance, to examine the effects of board four-year term capping on board effectiveness and to determine the impacts of board member performance contracts on board effectiveness. The researchers adopted a mixed methodology in which self-administered questionnaires and interviews were used to gather data from the respondents. The study used stratified random sampling in which board members, board chairpersons, chief executive officers (CEOs) and management of selected SOEs in Harare, Zimbabwe, were used. Data was presented in the form of tables, charts produced using SPSS software. Results of the study obtained show that the adoption of the right board size and composition and the use of performance contracts result in better performance of SOEs in Zimbabwe. The study concluded that there is a positive relationship between board size and organisational performance, a positive relationship between board composition and organisational performance. Also, results showed a positive relationship between the use of board performance contracts and organisational performance. The study, therefore, recommends that SOEs should practise good corporate governance by adhering to corporate governance legislation such as the Public Entities and Corporate Governance Act Chapter 10.31 which spells out how boards of SOEs must be composed.