IDEAS home Printed from https://ideas.repec.org/a/cwk/ajocsk/2024-13.html

Effect Of Corporate Governance on the Performance of State-Owned Enterprises in Zambia

Author

Listed:
  • Chisha Popopo Mulenga

    (Graduate School of Business, University of Zambia)

Abstract

A state-owned enterprise (SOE) is a legal entity created by a government to engage in commercial activities on behalf of the government. State-owned enterprises are an important part of most economies and make an important contribution to national development processes. In Zambia, state-owned enterprises operate in key sectors of the economy, including agriculture, forestry, energy, financial services, manufacturing, mining, real estate, tourism and ICT. The Auditor General's latest report named 13 state-owned companies as having suffered losses of K1,854,902,817 during the reporting period. The 2022 Auditor General's report also highlighted a number of financial and operational challenges, showing that the performance of state-owned enterprises in Zambia remains unsatisfactory. Therefore, this study was formulated to examine the impact of corporate governance on the performance of SOEs. A sample of 147 respondents was selected from 33 state-owned enterprises using the Taro Yamane formula, resulting in a 100% response rate. A mixed methods approach was used and the data was analyzed using SPSS from which correlation and summary coefficients were used to measure the relationship between the variables. The correlation coefficient of 0.612 from the SPSS results indicated that there is a strong positive relationship between the structure and appointment of the board, internal controls and the performance of SOEs. Furthermore, the R-squared (determination coefficient) of 0.375 from the SPSS results suggests that the performance of SOEs is improved by good corporate governance, which is 37.5% influenced by the structure and appointment of the board and internal controls and 62.5% can be linked to other factors that were not taken into account, such as micro and macroeconomic factors, lack of employee motivation and poor work culture in state-owned enterprises, among others. Therefore, the board should consist of members who have knowledge of the industry in which the SOE operates, and they should be appointed according to the policies of the respective SOE so that they can provide strict internal control systems that can benefit the better performance of state-owned companies.

Suggested Citation

  • Chisha Popopo Mulenga, 2024. "Effect Of Corporate Governance on the Performance of State-Owned Enterprises in Zambia," African Journal of Commercial Studies, African Journal of Commercial Studies, vol. 4(2).
    • Handle: RePEc:cwk:ajocsk:2024-13
    DOI: 10.59413/ajocs/v4.i2.7
    as

    Download full text from publisher

    File URL: https://ijcsacademia.com/index.php/journal/article/view/60
    Download Restriction: no
    File URL: https://libkey.io/10.59413/ajocs/v4.i2.7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sara Sultan Balbuena, 2014. "State-owned Enterprises in Southern Africa: A Stocktaking of Reforms and Challenges," OECD Corporate Governance Working Papers 13, OECD Publishing.
    2. Benaihia Kiptoo Bett & Dr. Allan Kihara Ph.D, 2022. "Corporate Governance Attributes and Performance of State-Owned Enterprises. A Review of the Literature," Journal of Business and Strategic Management, CARI Journals Limited, vol. 7(4), pages 43-67.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mwila Chisha & Dr. Bwalya Chilolo, 2026. "Assessing the extent of implementation of Corporate Governance Practices in Zambia. A study of companies listed on the Lusaka Securities Exchange (LUSE)," African Journal of Commercial Studies, African Journal of Commercial Studies, vol. 7(1).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. de Moraes Achcar, Helena, 2022. "South-South cooperation and the re-politicization of development in health," World Development, Elsevier, vol. 149(C).
    2. Christopher P.P. Shafuda & Rainer Lenz & Matthew Mirecki, 2020. "Corporate Governance of SOEs and Compliance With the SOE Governance Act in Namibia: A Survey," Journal of Public Administration and Governance, Macrothink Institute, vol. 10(4), pages 219249-2192, December.
    3. Misheck Mutize & Ejigayhu Tefera, 2020. "The Governance of State-Owned Enterprises in Africa: an analysis of selected cases," Journal of Economics and Behavioral Studies, AMH International, vol. 12(2), pages 9-16.
    4. Adeyemi Adebayo, 2022. "What Do State-Owned Development Financial Institutions (Sodfis) In South Africa Do?," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(235), pages 123-152, October –.
    5. F. K. L. Kgobe & K. R. Chauke, 2021. "Ethical leadership and public accountability: Problematiques of South Africa's State-Owned Enterprises," Technium Social Sciences Journal, Technium Science, vol. 26(1), pages 43-53, Decembrie.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cwk:ajocsk:2024-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Charles G. Kamau (email available below). General contact details of provider: https://ijcsacademia.com/index.php/journal .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.