A critical review of corporate governance reforms relating to South African state-owned enterprises
Corporate governance reform is an important aspect of broader reforms aimed at securing an environment attractive to both domestic and foreign investors and that enhances the benefits of investment to society. Of particular relevance is the relation between corporate governance practices and the increasingly international character of investment. If a country decides to reap the full benefits of the global capital market, and if it decides to attract long-term patient capital, good corporate governance arrangements must be credible, well understood across borders and adhere to internationally accepted principles. Equally important is the underlying importance of institution building for developing countries. In most cases poverty goes hand in hand with the lack of proper institutions, a vicious circle of mismanagement, inefficiencies, expropriation and corruption. The lack of properly functioning State Owned Enterprises (SOEs) as institutions or corporations, impacts directly on growth by limiting the availability of debt and equity investment. It also impacts on the distribution of income within a society. With more transparency and accountability the directors and executives will have less of an opportunity to fatten their bank accounts at the expense of all the other stakeholders and the society as a whole. The review of corporate governance reforms done in this research includes statutory reforms, development of codes of conduct and best practice, and institutional reforms will give a better evaluation of South Africa‘s corporate governance reforms within its own SOEs structures that will be judged against internationally accepted standards to consider the best interests of South Africa and its citizens. The positive and negative consequences that can stem from strengthening corporate governance regulations and assist in determining the best possible model for South African SOEs will form part of the recommendations of this research.