Public perceptions regarding the management and corporate governance of State-Owned Companies (SOCS) in South Africa

Abstract

State-owned companies (SOCs) play a crucial role in the economy of South Africa, serving as strategic assets and instruments of public policy. Statistics reflected that in 2023 South Africa had over 700 state-owned companies, which contributed approximately 17% to the country's GDP. These SOCs operated across a wide range of sectors, including utilities, transportation, finance, and strategic industries. However, many of these SOCs have been plagued by governance issues, financial mismanagement, and poor service delivery, leading to a growing public mistrust and negative perceptions. The aim of this study was to investigate the public perception of corporate governance practices in state-owned companies and the role they play in contributing to socio- economic development in eThekwini Metropolitan area, KwaZulu-Natal, South Africa. By drawing on existing literature and analysing the current state of corporate governance in SOCs, the study sought to identify the key challenges and proposed a conceptual framework for enhancing governance practices and improving public trust. Furthermore, several theories have been proposed to understand the dynamics of corporate governance in SOCs, including the Agency theory, the System theory, the New Public Management theory and Stakeholder theory. This study employed a mixed-methods approach, combining qualitative and quantitative data collection and analysis. The qualitative component involved in- depth interviews with key stakeholders, including 15 academics and experts in corporate governance. The interviews aimed to gather insights on the current state of corporate governance in SOCs, the key challenges, and potential solutions to enhance public perception and trust. The quantitative component involved a survey of the general public within the eThekwini municipal area to assess their perceptions of the corporate governance practices, service delivery, and overall performance of state-owned companies. The population of the study consisted of 400 respondents. The data collected from the interviews and survey were analysed using appropriate qualitative and quantitative techniques, including thematic analysis, descriptive and inferential statistics, and regression analysis. The qualitative findings corroborated the quantitative survey results, which revealed that a significant proportion of the public were dissatisfied with the overall performance and service delivery of state-owned companies. This was done through convergence analysis of the qualitative and quantitative data. This study has contributed to the existing literature on corporate governance in state-owned enterprises, particularly in the context of developing economies like South Africa. The proposed strategic corporate governance framework provides a comprehensive approach to enhance transparency, accountability, and efficiency in the management of state-owned companies, ultimately improving public perception and trust.