An analysis of competent board governance : the case of eThekwini Metropolitan Municipality

Abstract

Background: Governance quality research in South Africa is limited despite evidence that it is needed. Ineffective and unethical governance is a major concern internationally. South Africa’s sustainable development agenda depends on the quality of public and private sector governance, as well as its impact on the socio-economic prosperity of the nation. Research on the continuous improvement of governance is imperative. Purpose: The purpose of the study was to analyze contemporary corporate governance quality as relevant to determining institutional value and formulate a valid measure that reliably frameworks competent Corporate Governance. Method: The exploratory sequential mixed method study utilized both purposive and systematic sampling approaches to identify 97 participants who met the required characteristics to inform the study. Semi-structured interviews followed by a survey were conducted to generate data from practicing local government elites in the eThekwini Metropolitan Municipality in the Kwa-Zulu Natal Province of South Africa. The interviews were digitally recorded, transcribed, and anonymized with consent from participants. The survey data was collected electronically and processed using SPSS version 27. Qualitative and quantitative data was analyzed using directed content analysis, thematic analysis and exploratory factor analysis. Results: The findings revealed that out of the 23 identified indicators, stakeholder governance has the highest positive relationship with competent governance. Local governance elites are subjected to the same agency dilemmas as found in private sector directors, but in this case, it is due to the conflicting political-administrative interests that prevail. Furthermore, they are difficult to physically access because of their busy calendars and decentralized locations. More importantly, results indicate leadership is undergoing a profound shift towards competent representation by stakeholders, with stakeholders and for stakeholders. Implications for Practice: It is anticipated that knowledge obtained from the results of this research will be implemented to improve public and private governance quality. It is evident that, by using a stakeholder-integrated approach to Corporate Governance, value creation for stakeholders is more likely to result. The proposed model and implementation guidelines were developed to guide governance practitioners. Key Contributions Made by the Study: The ontological and epistemological domain of governance has been extended to add value to the existing body of empirical knowledge. Additionally, the development and use of the proposed model derived from this research can empower public and private sector corporate governance professionals to create more value for stakeholders