Exploring corporate governance practices on state entities : a case study of Umgungundlovu District Municipality

Abstract

Municipalities across the country continue to face growing criticisms due to lack of performance and providing services to communities. In South Africa, the district and local municipalities are no exception to the lack of performance. The perception to establish a working climate within the structures of the South African municipalities call for the municipal authorities to do more to increase the level of performance across the existing structures. Given this backdrop, this empirical study explored corporate governance practices of state entities with specific reference to three selected local municipalities in the uMgungundlovu district municipality. This empirical study aims to understand corporate governance practices towards performance in selected municipalities. Empirical datasets were sourced during semi-structured interviews aided by FGDs. The researcher applied semi-structured interviews to gather primary data from 106 participants and three FGDs to triangulate the research findings. Interview schedule and questionnaire were employed to collect quantitative and qualitative datasets. Quantitative data was analysed through the Social Package for the Social Science (SPSS) with several techniques including t-test, Analysis of Variance (ANOVA), Chi-square as well as regression. These tools were used to test the null and alternate hypotheses. In terms of qualitative data, thematic analysis was employed to conduct the analysis for interpretations. Empirical data was supported by outcomes based on secondary datasets. The findings revealed lack of corporate governance knowledge that makes it impossible for municipalities to perform to their optimum. One of the key findings that emerged was that “fairness” contributes to the overall municipalities’ performances. Based on all the seven principles of corporate “fairness” was the only concept that needs serious applications in the municipalities to stimulate performance, this empirical study recommends the need to provide adequate education and training to all employees of the municipalities with information on corporate knowledge. More knowledge regarding the practical applications of the corporate governance principles to increase performance in municipalities. Furthermore, education is required to explain the governance practices with the municipalities. Municipal authorities such as the ward councillors and Municipal managers must be advised to pay regular visits to communities to ascertain the needs of community members. The researcher suggests ongoing educational and training programs to provide employees with knowledge in corporate governance.