Board Effectiveness in Namibia’s State Owned Enterprise

Habilitación , 2022 , 121 Páginas , Calificación: A

Política - Región: África

The main objective of the discourse was to investigate board of director’s effectiveness in commercial public enterprises in Namibia. Various corporate scandal and collapse in many countries has been attributed to board of directors’ ineffectiveness. The study used qualitative method as a research strategy. The research used primary data collected through a qualitative, exploratory, and descriptive approach, by conducting a series of detailed semi-structured interviews with participants from two purposive selected commercial public enterprises made up of board of directors, managing director and company secretaries. The data was analysed using thematic context analysis.

The voice records were transcribed from the interview scripts to the diverse codes. The transcription of the intuitive editor enhanced quick changes in formatted format. Coding was data driven. Namely, the researcher commenced out without codes and crafted them through the reading of the discourse. The study focused on skills, diversity, experience, corporate governance, compliance requirements and accountability to shareholder and stakeholder. This was complemented by a comprehensive review of relevant literature. The key findings indicates that board of directors’ effectiveness and factors that influence board of directors’ effectives exist within the board of selected commercial public enterprise.

Participants point out the following factors that contribute to board being effective: Board of director’s cohesion and sufficient time allocated to board issues. Diverse technical skills, good relation, support and cooperation from shareholder plus sufficient funding good governance and Operational effectiveness of management. It is recommended that Board of directors to limit serving in many boards and allocated sufficient time to board packs to be able to lead public enterprises effectively and efficiently. The survey recommends the digitisation strategy and algorithmic business thinking by directors of the two enterprises. Innovative thinking to promote sustainability such as the use of solar power and deployment of nuclear energy.

TABLES OF CONTENTS

TABLES OF CONTENTS

LIST OF TABLES

LIST OF ABBREVIATIONS

CHAPTER ONE: INTRODUCTION
1.1 Introduction
1.2 Background of the study
1.3 Board of Directors Effectiveness on Public Enterprises
1.4 Conundrum
1.5 Objectives of the study
1.6 Significance of the study
1.7 Limitation of the study
1.8 Delimitation of the study
1.9 Delineation of key concepts
1.10 Conclusion

CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
2.2. Board of Directors Model
2.2.1 Theories of Corporate governance
2.2.2 The Agency Theory
2.2.3 Managerial Hegemony Theory
2.2.4 The Stakeholder Theory
2.2.5 The Stewardship theory
2.2.6 The Resource-Dependency Theory
2.2.7 Institutional Theory
2.2.8 Theoretical Framework
2.3.2 Board of Directors
2.3.3 The Role and Powers of Board of Directors
2.3.4 The power of the board and its impact on board effectiveness
2.3.5 Effective Boards
2.3.6 Impact of Covid
2.3.6.1 Loss of jobs
2.3.6.2 Restaurant industry
2.3.6.3 Hospitality Industry
2.4 Firm Performance
2.4.1.1 Failure to sustain competitive advantage
2.4.1.2 Failure to Align ICT with objectives
2.4.1.3 Management Challenges of Security and Control
2.4.1.4 Lack of Digital Preservation and renewable energy expansion projects into rural areas.
2.4.1.5 Lack of User Training
2.4.1.6 Lack of Systems Features and Inadequate supply of electricity
2.4.1.7 Lack of NOREED initiatives to Support Grid Integration of Renewable Energy
2.4.1.8 Lack of standby Generators in case of shortage of electricity
2.4.1.9 Challenges with Rural Electrification
2.5 Sustainable Development Information Systems Projects
2.5.1 Establishment of renewable energy such as Gigantic Solar Plant and Ocean Energy which provides energy to other parts of the World
2.5.2 Gigantic supply of Electricity from Nuclear Energy
2.6 Research Gap
2.7 Conclusion

CHAPTER 3: RESEARCH METHODS
3.1 Introduction
3.2 Research design
3.2.1 A case study design
3.2.2 Motivation for a case study
3.3 Research Onion
3.2.1 Saunders Philosophical arena
3.2.2 Feebleness and Robustness of Positivism
3.2.3 Feebleness and Robustness of Constructivism
3.2.4 Researcher Choice of Pragmatism Philosophical Argument applied in this survey
3.2.5 Feebleness and Robustness of Pragmatisms
3.2.6 in deductive Approach and Deductive Approaches
3.4 Sampling strategy
3.4.1 Population
3.4.2 Sample
3.4.3 Sampling techniques
3.4.3.1 Simple random or just random sampling technique
3.4.3.2 Systematic sampling
3.4.3.3 Stratified sampling
3.4.3.4 Cluster sampling
3.5 non-probability sampling techniques
3.5.1 Convenience/Haphazard sampling
3.5.2 Quota sampling
3.5.3 Snowball/Volunteer sampling
3.5.4 Purposive/Judgement sampling:
3.6 Research Instruments
3.7 Procedure
3.8 Data Analysis
3.9 Validity and Reliability
3.10 Research Ethics
3.11 Conclusion

CHAPTER 4: DATA ANALYSIS
4.1 Introduction
4.2 Presentation of findings
4.2.1 Demographic information
4.2.2 To investigate Board of Directors Effectiveness in Commercial Public Enterprise in Namibia
4.2.2.1 Board membership and board committees
4.2.2.2 How many meetings per year does the board of directors’ hold, including committees?
4.2.2.3 Board of directors’ composition and diversity
4.2.2.4 Corporate Governance requirements
4.2.2.5 An effective board consists of a well-balanced team
4.2.2.6 Mainboard and board committees' effectiveness
4.2.2.7 Board meeting, minutes, and agenda
4.2.2.8 In your opinion is their collaboration, trust, and effective teamwork within the board? (Is there conflict, disagreement among the boards?)
4.2.2.9 How do board monitor organizational performance and ensure accountability to shareholder and stakeholder?
4.2.2.10 Integrated Strategic Business Plan
4.2.2.11 in your opinion, does board effectiveness in your public enterprise correspond to the entity's financial performance?
4.2.2.12 Factors that contribute to board effectiveness and company performance
4.3. Effects of factors that influences the effectiveness of board of directors in Commercial Public Enterprise
4.4 Conclusion

CHAPTER 5: FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
5.2 Findings
5.2.1 Board membership and board committees
5.2.2 How many meetings per year does the board of directors’ hold, including committees?
5.2.3 Board of directors' composition and diversity
5.2.4 Corporate Governance requirements
5.2.5 An effective board consists of a well-balanced team
5.2.6 Mainboard and board committees' effectiveness.
5.2.7 Board meeting, minutes, and agenda
5.2.8 in your opinion, is their collaboration, trust, and effective teamwork within the board? (Is there conflict, disagreement among the committees?)
5.2.9 How do board monitor organisational performance and ensure accountability to
Shareholder and stakeholder?
5.2.10 Integrated Strategic Business Plan
5.2.11 To investigate the factors that influence the effectiveness of the board of directors' energy in Commercial Public Enterprises in the Khomas region
5.2.12 To determine the effects of factors that influence the effectiveness of the board of directors’ effectiveness in Commercial Public Enterprise in the Khomas region, Namibia
5.3 Conclusions
5.4 Recommendations
5.5 Directions for Future Research

REFERENCES

Executive Summary

The study focused on the board of directors’ effectiveness in commercial public enterprise in Namibia. The main objective of the study was to investigate board of director’s effectiveness in commercial public enterprises in Namibia. Various corporate scandal and collapse in many countries has been attributed to board of directors’ ineffectiveness. To emphasise further, Jauch (2012) and Limbo (2019), postulate that most commercial public enterprises in Namibia has been performing and operating below par as juxtaposed to expectations of the state as a shareholder, hence, board effectiveness which is a vital theme in corporate governance more so in these public enterprises has come into questions as a result of poor performance in recent years. The study used qualitative method as a research strategy. The research used primary data collected through a qualitative, exploratory, and descriptive approach, by conducting a series of detailed semi-structured interviews with participants from two purposive selected commercial public enterprises made up of board of directors, managing director and company secretaries. The data was analysed using thematic context analysis. The voice records were transcribed from the interview scripts to the diverse codes. The transcription of the intuitive editor enhanced quick changes in formatted format. Coding was data driven. Namely, the researcher commenced out without codes and crafted them through the reading of the discourse. The study focused on skills, diversity, experience, corporate governance, compliance requirements and accountability to shareholder and stakeholder. This was complemented by a comprehensive review of relevant literature. The key findings indicates that board of directors’ effectiveness and factors that influence board of directors’ effectives exist within the board of selected commercial public enterprise. Participants point out the following factors that contribute to board being effective: Board of director’s cohesion and sufficient time allocated to board issues. Diverse technical skills, good relation, support and cooperation from shareholder plus sufficient funding good governance and Operational effectiveness of management. It is recommended that Board of directors to limit serving in many boards and allocated sufficient time to board packs to be able to lead public enterprises effectively and efficiently. The survey recommends the digitisation strategy and algorithmic business thinking by directors of the two enterprises. Innovative thinking to promote sustainability such as the use of solar power and deployment of nuclear energy.

LIST OF TABLES

Table 2.1: Summary of theories and views of role players in corporate governance

Table 3.1 Interview Procedure

Table 4.1 Age Distribution of Participants

Table 4.2 Gender Distribution of Participants

Table 4.3 Board of Directors term of service

Table 4.4 Compliance to PEGA requirements

Table 4.5 Accountability reports to Shareholder and Stakeholder

LIST OF ABBREVIATIONS

Abbildung in dieser Leseprobe nicht enthalten

CHAPTER ONE: INTRODUCTION

1.1 Introduction

This introductory chapter outlines the main problem being analysed in this study and why the board of directors' effectiveness in Namibia commercial public enterprises is a worthwhile area of investigation. The board of directors' strategic purpose is to safeguard the company's prosperity by jointly directing the company's affairs while meeting the pragmatic benefits of practical shareholders and relevant stakeholders (PEGA, 2019). Henceforth, this study investigates board of directors' effectiveness in commercial, public enterprises.

The study set out to ascertain characteristics and roles an effective board of directors should have and focus on, the personal skills individual directors should possess and the process they need to employ to become structured as an effective board of directors (Levrau, 2007). The assumption underpinning the study is that a more effective board of directors contributes to a more effective company and corporate performance as postulated by Zahra and Pearce (1989), legalistic approach model on the links between boards of directors and company performance.

1.2 Background of the study

The Ministry of Public Enterprises (MPE) came into existence in March 2015, and the Public Enterprises Governance Act, Act 1 of 2019, henceforth PEGA, repealed the State-Owned Enterprises Governance Act 2006 (PEGA, 2019). As of March 2015, seventy-two (72) enterprises were classified as state-owned enterprises under Schedule 1. These enterprises were not categorised until 2019 when they were categorised into three enterprises: commercial, non-commercial, and extra-budgetary public enterprises.

Twenty-two (22) public enterprises were classified as commercial enterprises and defined by the Public Enterprises Governance Act (Act No. 1 of 2019) as those public enterprises that provide a product or render a service, can make a sustained profit, and do not perform a regulatory function or administer a fund in the public interest. The state solely owns these public enterprises as a shareholder. Section 9 and 10 of the PEGA require that the board of directors be appointed to govern and direct all public enterprises on behalf of the shareholder. According to Higgs (2003), creating a board of directors monitors the firm's performance.

Furthermore, it is predicted that if the board of directors perform their duties effectively, the shareholder's wealth would be enhanced accordingly. Koortz (1967) posit that the board of directors is a body that epitomises the interest of shareholders and is responsible to them for a series of specific duties, encapsulating the delineation of the company's strategy and philosophy, oversight of executive management and implementation of internal controls. This thesis will only focus on the board of directors of two commercial, public enterprises, namely Namibia Power Corporation (Proprietary) Limited, henceforth Nampower and Namibia Wildlife Resorts Company henceforth NWR.

Nam Power

Nam Power describes itself as Namibia's national power utility and has, since its establishment on 1 July 1996, persistently remained an engine of the state's economy. As a parasternal, Nam Power adheres to the legal and regulatory frame of reference in Public Enterprises.

Governance Act (Act No. 3 of 2006) as legislated, the Companies Act (Act No. 28 of 2004), the Electricity Act (Act No.4 of 2007) and all other legislation applicable to its enterprise. The holistic strategic direction and governance of Nam Power is the responsibility of the Board of Directors.

The strategic direction Nam Power pursue aims to enhance its mission, which is "to provide the energy needs of their customers, fulfil the aspirations of their staff and satisfy the expectations of their stakeholders" through the provision of quality and reliable products and services at a reasonable cost in a sustainable manner.

Nam Power’s core enterprise is generation, transmission, and energy trading, which occurs within the Southern African Power Pool (SAPP), the enormous multilateral energy platform on the African continent. Nam Power supplies bulk electricity to the Regional Electricity Distributors (REDs), mines, the Namibia Water Corporation Ltd (Nam Water), farms and Local Authorities (where REDs are not operational) throughout Namibia.

Given a myriad of role players in the Electricity Supply Industry (ESI), the Ministry of Mines and Energy (MME) takes on the role of a custodian of Namibia's energy sector. At the same time, the Electricity Control Board (ECB) acts as an ESI regulator. Nam Power, therefore, take on the role of Namibia's leading electricity supplier in conjunction with the REDs and some Local municipalities as the distribution licensees across the country. Recently several Independent Power Producers (IPPs) have joined forces with Nam Power as renewable energy generators.

Nam Power owns and executes three power stations with a 459.50 megawatt (MW) installed capacity. These power stations are the primary sources of local power generation capacity. It comprises 347 MW Ruacana hydro-electric power station in the Kunene region, 90 MW Van Eck coal-fired power station outside of Windhoek and 22.5 MW Anixas diesel-powered power station at Walvis Bay.

Nam Power owns a world-class transmission configuration and a network of 66 kV to 400 kV of overhead lines spanning more than 11,709 km throughout Namibia, making it one of the giants of its kind in the world.

The national grid has been designed and built mainly by Namibians. In addition to these lines, transmission's asset base includes one hundred and forty-nine 66 kV – 400 kV transmission substations, 3,615 mega volt-amperes (MVA) of transformer capacity, ninety-four 11 kV – 33 kV distribution substations and specialised high voltage direct current (HVDC) and static VAR compensator (SVC) devices.

The robust Energy Trading Platform system enables with a high degree of accuracy the successful trading activities such as load forecasting, market schedule, energy and financial settlement, and reporting. The National Control Centre, situated in Windhoek, operates on a 24-hour basis to ensure system availability and is responsible for real-time operation and management of the utility's generation, transmission, and distribution system. Nam Power has dedicated employees who embody excellence and commitment and form part of the nation's infrastructural backbone through their collective skills and knowledge.

This dedicated workforce comprises an experienced senior management team overseen by a board of directors actively involved in enforcing best practices, corporate governance, and other business principles (Nampower Annual Audit Report, 2019). Given the prior background, Nampower has found itself in the new age of power production. New entrants in the energy sector, the independent power producer, and the use of solar panels by consumers and all other forms of renewable energy production have negatively affected the operation and profit of the Nampower. It will require the board of directors to devise strategies and find new ways to sustain and ensure that the enterprise is a going concern, and the board of directors being effective in their guidance will be brought to the fore. The findings of this study will enable the board to devise new strategies to improve and advance the enterprises.

Namibia Wildlife Resort (NWR)

Namibia Wildlife Resorts (NWR) is strategically poised as a commercial State-Owned Enterprise that provides tourism and hospitality management services in national parks; NWR is the single largest provider of accommodation facilities. This legal entity is established through an Act of Parliament, the Namibia Wildlife Resorts Company Act (Act 3 of 1998). Other legislations pertinent to the operations of NWR comprise the Companies Act (Act 61 of 1973, as amended), the Public Enterprise Act (Act 2 of 2006, as amended), the Public Enterprises Governance Amendment Act (Act 1 of 2019) and the Public Procurement Act (Act 15 of 2015).

NWR's sole mandate is to provide tourism-related services in Namibia's protected areas (National Parks). In June 2016, NWR was classified as a commercial, public enterprise and was placed under the authority of the Ministry of Public Enterprises.

Although the new hybrid centralised governance model resulted in NWR reporting to the Ministry of Public Enterprises, the Ministry of Environment and Tourism (MET) remained the line ministry that NWR wrote to in terms of strategic and operational support until late in 2019, when the Ministry of Public Enterprises was officially mandated to oversee the company.

According to its establishing Act, the Namibia Wildlife Resorts Company Act (Act 3 of 1998), the objectives of the company are to conduct a wildlife resorts service, through among other things: managing, controlling, preserving, utilising, and enhancing. The wildlife resort service according to general business tenets, promoting and triggering training and research. It is done to increase the productivity of the wildlife resorts service, grooming, with or without the involvement of the private sector, commercially viable business or projects concerning the wildlife resorts service or the tourism industry in general. Promoting the development of environmentally sustainable tourism to preserve the assets and attractions on which the tourist industry depends, and safeguard and maintain ecological processes, biodiversity, aesthetic, and cultural qualities for the long-term benefit of the tourism industry and the Namibian people.

The Act directs the company to exercise its powers to enhance corporate profit and shareholder return on equity (ROE). It is to be attained by promoting economically prosperous and efficient wildlife resorts services steered on sound business, conservation, and environmental principles. In addition, the Act further states that the company may, amongst others: finance or otherwise participate in the development of natural resources, establish subsidiary companies or acquire an interest in any other company, co-operative society or enter into a partnership or joint venture with any person, effect the transfer or assignment of any assets, liabilities, rights or enactments of the corporate to any of its subsidiaries and determine the rates and charges to be levied for services rendered by the company.

NWR resorts and camps are divided into three categories to suit individual taste, comfort, and preference. These are Eco Collection, Adventure Collection and Classic Collection. NWR has introduced exclusive products that offer ultimate relaxation, superior service, and comfort, all within the confines of Namibia's most pristine wilderness areas. Its services are provided at facilities with a strong focus on environmental sustainability and compliance. Sossus Dune Lodge, inside the Namib Naukluft Park, and Onkoshi, inside Etosha National Park, are the two Eco Resorts, with Dolomite also counted in this category. Popa Falls is also an Eco resort introduced in December 2013.

Moreover, NWR was established to fulfil objectives like induction programme and brand value propositioning to all newly recruited employees, provide continuous training of employees and customer care to support the highest level of motivation and service delivery, up skilling through specifically designed and certified courses in modern hospitality and culinary arts as per the Namibia Training Authority (NTA) curriculum and raising to industry demands is also one of the objectives on NWR (NWR Integrated Report, 2020). In its current form, NWR sustainability and operation is very problematic. The effect of covid-19 on the tourism industry where NWR operates has negatively impacted the enterprises' profitability, and the shareholder finds it very hard to keep it afloat. Nam powers requires the board of directors to devise strategies and find new ways to sustain and ensure that the enterprise is a going concern. The board of directors being effective in their guidance will be brought to the fore.

1.3 Board of Directors Effectiveness on Public Enterprises

Board of directors' effectiveness on public enterprises' financial performance have been a challenge in many developing countries. Many studies conducted in developing countries on the same matter have found positive links between the board of directors' effectiveness and company financial performance (Vagliasindi & Bank, 2014). Performance is subjective and determined in many ways and considering that, it was lack of corporate governance and board of directors' effectiveness that led to the 2007/8 global economic and financial crisis resulting in the collapse of corporations in many countries. It has increased the need for transparency. Considering regulatory oversight has brought the need for good corporate governance and board effectiveness (Burkhanov, 2011).

Effective contribution is only present when the board of directors has the capacity and skills to effect qualitative monitoring, counselling, decision-making, and risk management. According to Zahra and Pearce (1989), the board of directors are accountable for corporate leadership without actual interference in day-to-day execution, which are duties of the chief executive officer (CEO) and senior executives. Further to that, the Revised Model Business Corporation Act (1985) stated that all corporate powers should be machinated by or under the authority of, and the enterprise and affairs of the corporation administered under the direction of its board of directors, subject to any limitation outlined in the articles of incorporation. (p.193).

Recent studies indicate a significant relationship between board effectiveness and corporate performance (Zahra and Pearce, 1989; Palaniappan, 2017). Cornforth, Edwards, & Hall (1997) found, among others that, regular board performance evaluation, team building, and induction remain vital for developing effective boards. Zahra and Pearce (1989) posit that board effectiveness leads to company performance and emphasise four board attributes (board composition, characteristics, structure, and process) that determine directors' version of their roles.

The researcher ascertains that board composition, characteristics, structure, and process are determinants of board performance of its primary role, which is service and control. According to Ntim (2013), influential directors' contribution enhances the organisation's performance and balances the interests of the organisation's managers with that of the shareholders. Good governance requires an effective corporate structure, and the primary tool of sound control is an effective board of directors.

The Financial Reporting Council (2011) defines an effective board of directors as developing and promoting its collective vision of the company's purpose, culture, values, and behaviour it wishes to advance in conducting its business. It further emphasises that challenge is as significant as teamwork, and as such, an effective board of directors will not constantly be a comfortable place. Further to this, the King IV Report (2016) defines effective leadership as result-driven, about achieving strategic objectives and positive outcomes. Ethical and effective leadership complements and underpin each other. Board of director effectiveness is measured according to a director's ability to execute their fiduciary duties on the board (Ferris et al., 2003).

The board of directors are the core of corporate governance, and numerous reported corporate scandals are due to the board of directors' ineffectiveness or lack of oversight. Mandaza (2014) contend that most of these scandals have revealed a failure of corporate governance. Even though the most sensitive cases of corporate governance failure have been in continent America and Europe, Africa, and Namibia has seen their fair share of issues portraying corporate governance botched, a case in point was the recent SME bank collapse the liquidation of the national airline. In all these cases board of directors were found deficient.

To postulate further, countries in the SADC region has experienced a slump in the economy, high external debt, and collapse of public enterprises due to corporate governance failure (Mandaza, 2014). During the early 1990s in Zimbabwe, state enterprises and parastatals (SEPs) were the most effective strategic pillars that propelled the economy to be robust and perform optimally (Mhandu, 2015). However, in recent times Zimbabwe has experienced deterioration in SEP's performances, and they have suffered an economic slump that has adversely affected the whole economy.

According to Mhandu (2015), apart from hyperinflation, high unemployment, and other economic difficulties, it was observed that this decline in SEP's was likewise partly because of poor corporate governance and lack of transparency & accountability within these institutions. State enterprises and parastatals like Zimbabwe Electricity Supply Authority (ZESA), Premier Service Medical Aid Society (PSMAS) and Zimbabwe Broadcasting Corporation (ZBC) collapsed because of the board of director's failure (Chavanduka et al., 2014). The grim picture is the same for states in Sub-Saharan Africa (SSA). A study by Quartey and Quartey (2019) illustrates that public enterprises in those states have become a substantial financial burden for governments, owing to poor performance and the inability to break even.

Unfortunately, this appears to be the case for most African governments, and as illustrated, this reflects the Namibian case. Limbo (2019) lamented that since the attainment of Namibia independence, public enterprises in the country had been subjected to constant criticism, specifically on their poor performance and inability to meet performance targets. Additionally, most of these public enterprises have been tainted by maladministration and the proliferation of corruption that has created a recurring monetary burden to the state (Mubwandarikwa, 2013).

Organisation for Economic Co-operation and Development (OECD) (2016), public enterprises are deployed by states as an instrument of an effective plan, implementation, and service delivery. Public enterprises are established to improve the delivery of public service by applying commercial-like values and objectives that would result in enhanced effectiveness. By using the business-like principles and ideals, commercial, public enterprises are predictably anticipated to be self-sustaining without depending on state funding or financial bailouts. In contrast, non-commercial public enterprises are expected to, at the minimum, break even or fully meet their mandate (Weylandt, 2017).

The Public Enterprises Governance Act (Act No. 1 of 2019) defines commercial, public enterprises as those enterprises that provide a product or render a service, can make a sustained profit, and do not perform a regulatory function or administer a fund in the public interest. In line with the Ministry of Public Enterprise's mandate, public enterprises are created by the state to be critical contributors towards sustainable economic development. The state intends to achieve this through principled leadership and creating a conducive environment for public enterprises to contribute to socio-economic development.

As a custodian of all commercial, public enterprises and as a shareholder ministry, the Ministry of Public Enterprises is entrusted with corporate governance. It is tasked to ensure that ethical leaders are at the helm of this shared enterprise. The Fifth National Development Plan, henceforth NDP5, outlines a development strategy that aims to improve the living conditions of every Namibian, and the principle of sustainable development permeates NDP5. In the same spirit, NDP5 has four (4) key goals, namely:

- Achieve inclusive, sustainable, and equitable economic growth.
- Build capable and healthy human resources.
- Ensure a sustainable environment, enhance resilience, and promote good governance through effective institutions.

The public enterprise's sector has a critical role in all four pillars, and the fourth pillar forms the heart of the Ministry of Public Enterprises and the core purpose of all public enterprises. Commercial Public Enterprises operations and functions significantly impact the economy and the fiscal state of Namibia. They manage billions of dollars in public assets, and they see those critical services such as energy, water, healthcare, and education are delivered to the citizens (Kefas, 2014).

In recent years there has been a renewed interest in public enterprises and how effectively they are managed. As state entities and the state are the sole shareholders of these entities, there is a need for an appointed board of directors to be effective and manage this entity in the best interest of the shareholder. The PEG Act, 1 of 2019 prescribes that all public enterprises must have governance structures, and the Minister responsible for Public Enterprises must determine criteria for board performance evaluation. In addition, such Minister is obliged by the Act to enter into written governance agreements with the boards of directors about, among other things; shareholder's expectations of such enterprises' scope of business, efficiency and economic performance, and attainment of objectives; key performance indicators in terms of which the PE's performance will be evaluated and any other matter relating to the implementation of such enterprises' functions under any law.

Unfortunately, the state of corporate governance in Namibia has for the past decades not been effective and has been strongly criticised. As evidence to this critic, the SSC lost over N$100 million in the Avid investment scandal. Another N$30 million in the Offshore Development Company, in 2011, the Government Institution Pension Funds lost over N$560 million and the Small & Medium Enterprises (SME) bank lost over N$200 million results in its liquidation and 208 job loss (Thlage, 2017; Duddy, 2011; and Katjangua, 2017).

All these funds were said to have been lost due to unfortunate decisions taken by the board of directors without appropriate risk assessment and due diligence check. Against this background, the study investigated board effectiveness on the financial performance of commercial, public enterprises in Namibia by focusing on Nampower and NWR as a case study.

1.4 Conundrum

The impact of board of directors on company performance and their effectiveness in fulfilling their fiduciary duties is essential in today's volatile economic and political environment, more so in developing countries (Ntim, 2013). Enterprises appoint a board of directors to monitor and control the performance of the enterprises; hence board of directors had a fiduciary duty toward these companies (IODSA, 2016). Various corporate scandals and collapses in many countries have been attributed to the ineffectiveness of the board of directors (Agrawal & Chadha, 2005).

In recent years, public enterprises in Namibia have consistently made headlines primarily for the wrong reasons. Namibia Airport Company and the N$30 million retrenchment package, NWR near collapse and golden handshake for the CEO, Road Authority owes contractors N$47 million, National Housing enterprise violating the mandate of providing affordable housing (Jauch, 2012). The government has continuously subsidised and bailed out enterprises, and as of 2011-2012, that figure has reached N$2 8 billion (Jauch, 2012).

Figures from the Ministry of Public enterprises indicates total debt of PEs stands at N$43 billion with a negative total return on assets and an unsustainable total loss of N$150 million per annum (Tjitemisa, 2019). Limbo (2019) attributed a situation to poor financial management, lack of accountability within the public enterprise, and inadequate monitoring measures from shareholders. The researcher also stated the failure and closure of some public enterprises in Namibia, with no performance improvement from the board of directors.

To emphasise further, Jauch (2012) and Limbo (2019) postulate that most commercial, public enterprises in Namibia have been performing and operating below par compared to the state's expectations as a shareholder. Hence, board effectiveness, which is a vital theme in corporate governance, more so in this public enterprise, has come into question due to poor performance in recent years. Several corporate governance initiatives, such as creating the Ministry of Public Enterprises, the Namcode (based on the King Code in South Africa), and the Procurement Board, were introduced to govern the operation and conduct of public enterprises and their board of directors. The PEG Act, 1 of 2019 stipulated regulations that should be followed when the board of directors are being appointed and that there must be an evaluation of performance, limited serving terms. That governance and performance agreements must be entered into between the board of directors and the line minister, the Minister of Public Enterprises under whose ambit all commercial, public enterprises resides.

Furthermore, according to Agrawal and Chadha (2005), the board of directors' ineffectiveness has been blamed for various corporate scandals and collapses in many countries. In Namibia still, Kefas (2014) posit that when enterprises performance is good, they provide a solid base for the economy. When performance is poor, they become a crushing financial and political burden. Similarly, Limbo (2019) stated of failure and closure of some public enterprises in Namibia, with no performance improvement from the board of directors. Commercial, public enterprises in Namibia have a vital role in the country's economic growth as the state has invested heavily in these public enterprises with little or no return on investments. The former Minister of finance, while making a presentation on the performance of state-owned enterprises, lamented that "the overall performance of state-owned enterprises with regard to revenue they earn for the state has been poor and in need of drastic improvement" (the Republic of Namibia, 2010). It is perceived that good corporate governance and effective board oversight are cornerstones to improving corporate performance.

The research state-owned as a study about the public enterprises selected mainly based on their sizes, sources of funds and the sectors in which they operate. Both established public enterprises operate in a partial monopolistic environment. Nampower in the energy sector and Namibia Wildlife Resorts (NWR) are role players in the tourism industry. Though Nampower has been viewed as performing, Namibia Wildlife Resorts has always been regarded as counterproductive, for a fact that in less than twenty years, more than five Managing Directors served at the helm of Namibia Wildlife Resorts with differing degrees of commotion and dissatisfaction, all of which is well documented. The researcher investigated and evaluated the boards' effectiveness in the two commercial, public enterprises.

This study sought to investigate and determine determinants that trigger the board of directors' effectiveness in commercial, public enterprises in Namibia, focusing on Nampower and NWR.

1.5 Objectives of the study

The main objective of this discourse was to investigate board of directors' effectiveness in commercial, public enterprises in Namibia.

The specific objectives were as follows:

1. To investigate the factors that influence the effectiveness of the board of directors’ effectiveness in Commercial Public Enterprises in Khomas region
2. To determine the effects of factors that influence the effectiveness of the board of directors

Effectiveness in Commercial Public Enterprise in Khomas region Namibia.

1.6 Significance of the study

The board of directors' effectiveness is the lifeblood of every public enterprise. Empirically, few studies have been conducted on the board of directors' energy on commercial, public enterprises financial performance in Namibia.

An effective board of directors should be the aim of every public enterprise and the overall community who have a vested interest in commercial, public enterprises' assets and overall performance. As such, state-owned enterprises are expected to be the locomotive of the economy without state planning as the engine. This study's results might influence the implementation of best strategies that will enhance the board of directors' effectiveness on PEs financial performance.

The study will benefit employees at various public enterprises, including the Ministry of Public Enterprise economy's locomotives, to policy interventions. This study's results might influence public enterprise governance and financial performance. The same will contribute to the existing literature on corporate governance.

Additionally, the study will enhance the Ministry of Public Enterprises' fathoming of board effectiveness on commercial, public enterprises financial performance, improve board appointment and induction process, and board performance evaluations. Recommendations will enable policymakers and the board of directors in public enterprises to focus on the identified characteristics that lead to improved financial performance. Other scholarly researchers might build on the research findings by using it as secondary data to expand and cover different aspects of the board of directors of commercial, public enterprises other than board effectiveness on financial performance.

1.7 Limitation of the study

As per the Public Enterprises Governance Act 1 of 2019, there are twenty-two (22) classified commercial, public enterprises in Namibia. The researcher would have hoped to study boards of directors of all those commercial public enterprises to obtain a broader understanding of the board of directors’ effectiveness of all twenty-two commercial public enterprises. Still, it was not feasible by the nature of the study and due to resources and time constraints. Additionally, the Public Enterprises Governance Act, 1 of 2019, stipulate that the board of directors can only serve for three (3) years; hence the unavailability of participants during data collection might hinder the study from engaging all the participants to provide the relevant data required for the survey especially board members who served from 2016 to 2020.

However, given the nature, presence, and history of the two commercial, public enterprises, Nam power being at the forefront of energy supply and operating in a partial monopolistic environment and NWR owning the large share of the tourism industry, these two enterprises consistently have a board of directors in place and given their background, the study offered sufficient findings regarding board effectiveness within the commercial, public enterprises in Namibia.

1.8 Delimitation of the study

This study purposively focused on Nam power and Namibia Wildlife Resorts, which continuously experienced board of directors' turmoil and governance challenges and made headlines in local news. It enabled the researcher to gather sufficient data and generalise findings on board effectiveness and corporate performance of commercial, public enterprises. Both entities are based in the Khomas regions.

1.9 Delineation of key concepts

Board of Directors-generally board of directors is a group of individuals elected to represent shareholders. The governing body typically meets regular (four board meetings per annum are regarded sufficient) to set policies for corporate management and oversight.

The board of directors set the strategies of corporations. Every public company must have a board of directors.Inthe context of Nicholson and Kiel (2004), board effectiveness is mainly concerned with task outcomes and occurs by fulfilling a role set.

Board effectivenessconcerns the task the board of directors is expected to perform. In particular, the researcher describes an effective board as one that can successfully execute a dual role set, namely its strategic and monitoring role. Generally, effectiveness is the degree to which something successfully produces the desired results.

Commercial Public Enterprises, as defined by the Public Enterprises Governance Act, No. 1, 2019 under section 2(2) (a), a commercial enterprise can be aboard, corporation, council, fund, trust, body, business, or company that provides a product or renders service, can make a sustained profit, and does not perform regulatory or administers a fund in the public interest.

Corporate Governance:Sir Adrian Cadbury (1992) defines corporate governance as a system by which companies are directed and controlled. Furthermore, Nadler and David (2006) concur that corporate governance concerns how entities are governed, managed, and held to account. They posit that concepts such as responsibility, transparency, accountability, monitoring and evaluation of resources are inextricably linked with corporate governance.

1.10 Conclusion

Board effectiveness has triggered incremental attention over the decade by legislators as well. For instance, the Cadbury Report in the UK (1992) stressed the essence for the board of directors within listed corporates to be efficacious and reviewed board structure as well as the accountabilities of the board’s directors. More recently, the European Commission has started a Green Book with the goal of starting a debate around corporate governance and assessing the proficiency of monitoring and enforcement systems that member states marshalled have put in place. The remainder of this discourse is structured as follows. The next chapter literature and theoretical framework, landscape the terrain of theories on board effectiveness. Segment 3 addresses the research methodology. Section 4 entails the empirical study in which board effectiveness is linked to the distinct types of board structures. The survey ends with a conclusion, and pragmatic recommendations for board members.

CHAPTER 2: LITERATURE REVIEW

2.1 Introduction

The literature review examines scholarly information and research-based information on a specific topic or area of research (Dawidowicz, 2010). It endeavours to create a complete and accurate representation of facts, human capital and research-based theory at the disposal of a given research area. Sekaran (2008) describe literature review as a clear and logical presentation of the relevant research work done as far as a particular sphere of research is concerned. This chapter reviews the literature related to board effectiveness as an indicator of corporate governance and its influence on the corporate performance of state-owned enterprises. The chapter covers the theories of corporate governance as the focus of this study centres on the agency theory, delineations of board effectiveness, corporate ascendency, and company performance. The chapter is distributed into pertinent topics of what was found in literature concerning the focus and objectives of the research.

2.2. Board of Directors Model

There are leading approaches to the organization of corporate boards and hence corporate governance systems: the Anglo-US one-tier board model, the continental European two-tier board model, and the Japanese model (Shleifer and Vishny, 1997). The Anglo-Saxon model is used in the US, the UK and Canada, while the continental European model is used in European countries such as Germany, Switzerland, Austria, Finland, and Netherland. The Japanese model is used mainly in Japan and some other. Asian countries such as Korea. For Continental Africa, the Anglo-US model is used due to the colonial past. Namibia's corporate governance framework mirrors South Africa's, and the King III (2009) and Cadbury Report was the primary source for drafting Namibia code of corporate governance - the Nam Code (2014). Namibia, therefore, follows the Anglo-US model of governance.

The primary players in the Anglo-US model are management, directors, auditors, regulators, and shareholders, and they form what is known as the corporate governance model as shown in the triangle for corporate governance figure 2.1 below. China has shown robust competitiveness in the pillars of macroeconomic ecology and market size. However, the indicators demonstrating the quality of corporate governance such as institutions and financial market development are still feeble. China has constituted wonderful strides on transforming governance of SOEs (Malin, 2019). After more than 30 years of transformation, SOEs in China have been radicalised from a model in which the state held all the property proprietorship and administrative decisions, to a contracting model in which the enterprise became accountable for its own profits and losses, which shows the framework of modern enterprises within most developed countries Figure 2.1 depicts the dynamics of this model.

Figure 2.1 Corporate Governance Triangle

Abbildung in dieser Leseprobe nicht enthalten

Source: Pemberton (2019)

The Anglo-US system, from which numerous elements of governance are taken and copied by others, emphasises the primacy of shareholders (Shleifer and Vishny, 1997) and postulates that top executives' primary responsibility is to maximize shareholder's wealth (Jensen and Meckling, 1976). This Anglo-American model focuses on several governance mechanisms, including the separation of ownership from control, financing through the stock market, and the use of independent directors (Dalton et al., 1998).

In this governance system, the board of directors' primary responsibilities is to appoint, counsel and fire the CEO and decide on critical strategies. Executive directors (who are members of management) and non-executive directors (who are outsiders) function together in one organizational layer that constitutes the board. The shareholders elect committees at their annual general meetings. In Namibia, the government appoints and controls the composition of the board of directors, for public enterprises an arrangement that follows the agency theory that generally defines the relationship between government as a shareholder and the specific agents who are expected to ensure that government objectives and active interest are met (Public Enterprises Governance Act, Act No. 1 of 2019).

2.2.1 Theories of Corporate governance

The rationale for corporate governance theories was to address the challenges of governance of firms and companies from time to time. Various theories describe the relationship between different stakeholders of the business while carrying out the activities of the business (Holmstrom 1979; Murphy 1999; Freeman 1984; Horisch, Freeman, & Schaltegger, 2014). For this study, the agency, stakeholder, stewardship, resource dependence and institutional theories were considered relevant for the board of directors' effectiveness and functions.

2.2.2 The Agency Theory

The monograph on corporate governance can be traced back to discussing agency problems (Jensen and Meckling, 1976). They argued that a firm's separation of ownership and control could result in agency problems. It arises when managers make decisions that benefit them at the expense of the shareholder. The Agency Theory is the dominant theory underpinning corporate governance. This theory arises from economic theory and states that the separation of management from control in firms creates agency issues due to the conflicts of interest between owners and managers who are assumed to pursue self-interest (Fama & Jensen, 1983; Eisenhardt, 1989). Eisenhardt (1989), this relationship enables the agent's information asymmetry, goal conflicts, adverse selection, and opportunistic behaviour. In agency theory terms, the owners are principals, and the managers are agents. There is an agency loss which is the extent to which returns to the residual claimants, the owners, falls below what they would be if the principals (the owners) exercised direct control of the corporation. Based on this theory, the agents' executives possess significant freedom and powers to manage shareholders (the principals) resources. It is believed that the executives have some objectives that may be conflicting with that of the owners, hence ignoring shareholders wealth maximisation objective (Masson, 1971).

The theory postulates some mechanisms which can reduce agency loss (Eisenhardt, 1989). These include incentive schemes for managers which reward them financially for maximizing shareholder interests. Such systems typically have plans whereby senior executives obtain shares, possibly at a reduced price, thus aligning executives' financial interests with shareholders (Jensen & Meckling, 1976).

In addition, Fama (1980) contends that with the competitive forces inside and outside the firm, are an effective strategy to develop mechanisms to monitor the performance of management, thus reducing agency problems. This dilemma ushered in the need for control and, therefore, a board of directors. Fama and Jensen (1983) and Verhoest (2005) posit that the board of directors is one of the internal control mechanisms to minimize these agency issues. They provide oversight, monitoring, and management control to ensure the alignment of interests between management and investors.

In this regard, it is being expected that the board of directors is to perform the painstaking function of monitoring and rewarding top executives to ensure the attainment of shareholders' wealth maximisation (Zahra & Pearce II, 1989). Further, Shleifer and Vishny (1997) argue that legal protection and concentrated ownership are important ways of mitigating agency problems.

Holmstrom (1979), Murphy (1999) proposed that one method of controlling agency problems is linking managerial compensation to the company's performance, giving managers incentives to maximize shareholder value. However, Frydman and Saks (2010) posit that payment alone cannot achieve good corporate governance.

In addition to this, McGulgan, Kretlow and Moyer (2006) described the principal-agency problem as a situation where there is an escalating antagonism between the interest of stockholders and that of management. According to the researcher, the firm's objective is to maximise shareholders' wealth through allocative, productive, and dynamic efficiency; the firm aims to maximise profits, increasing shareholders' wealth.

Therefore, board directors and management are obligated to ensure that firms are run in the best interest of shareholders. The fundamental predicament of corporate governance in the principal–agency theory stems from the principal-agent relationship arising from the separation of beneficial ownership and executive decision-making. This separation causes the firm's behaviour to deviate from maximising profit. It occurs because the interests and objectives of the principal (the shareholders) and the agent (the managers) differ when ownership and control are separated. Since the managers are not the firm's owners, they do not bear the total costs or reap the full benefits of their actions. Therefore, although investors are interested in maximising shareholder value, managers may have other objectives, such as maximising their earnings or growth in market share.

2.2.3 Managerial Hegemony Theory

The management hegemony theory describes the board as a legal fiction, a co-opted appendage institution that, notwithstanding its formal governing power over management, it is dominated by management. Therefore, their role is seen as passive and compliant, rubber stamps for management's proposal and decisions; this board is ineffective in alleviating conflicts of interest between management and shareholders (Mace, 1971; Herman. 1981; Vance, 1983).

Mace (1971) and Williams (1979), articulate the management hegemony theory results from the board's lack of detachment, leading to control over selecting outside board members. In addition, Herman (1981) and Wolfson (1984) postulate that directors' lack of objectivity leads to directors being loyal to management and are expected to rubber-stamp their policies. Furthermore, passive board behaviour further attributed to their relative lack of knowledge about the company's affairs (Estes, 1980)

In an instance where management influences the appointment of directors, these directors are likely to cease from explicit criticism of managements' behaviour not to jeopardise their board seat and its associated benefits, such as compensation and the prestige and status associated with board membership. It will adversely affect the board's monitoring and control function. Therefore, it is imperative to have a committee controlled by independent outside directors who have not been appointed by management or have a social link that leads to effective corporate governance.

It will help in alleviating managerial hegemony theory. In an emerging economy like Namibia, and according to the Public Enterprises Governance Act 1 of 2019, the board of directors of public enterprises are appointed by the shareholder, which minimises the management hegemony theory.

2.2.4 The Stakeholder Theory

In contrast with an agency, the theory is Stakeholder Theory, which argues that companies have accountability not only to themselves but to other stakeholders that are affected by the firm internally and externally (Freeman, 1984; Horisch, Freeman, & Schaltegger, 2014). Therefore, the board of directors should manage the interests of all these stakeholders and offer a balanced view on their advising and monitoring duties to the organisation (Hung, 1998).

A stakeholder-based view of value is vital to understand from a managerial perspective. Managers typically focus on things that lead to higher financial performance based on what gets measured (Harrison & Wicks, 2013), but a stakeholder-based performance measure compels managers to take a broader view of value creation (Freeman, 1984; Harrison & Wicks, 2013). Assessing value through the lens of stakeholder's enables managers to engage more effectively and holistically with the people and processes involved in value creation (Harrison & Wicks, 2013).

Further to this, Freeman's (1984) definition of stakeholder’s states that "corporations have stakeholders, that is, teams and persona who benefit from or are harmed by, and whose rights are violated or respected by corporate actions. Stakes require the action of a certain sort, and conflicting stakes require methods of resolution" (Freeman, 1984). The effectiveness of corporate governance depends on protecting the shareholders' interests, creating new wealth, and sharing it with other stakeholders (Aguilera et al., 2008). In line with this school of thought, it can be agreed that board directors can only contribute to organisations' success and value if they manage all stakeholders that affect the organisation. To effectively manage these stakeholders, directors need to employ their capacity and skills effectively.

2.2.5 The Stewardship theory

The stewardship theory contends a perspective of managerial motivation different from the agency theory. Under this theory, the executive manager or agent avoids self-serving and essentially wants to be a good steward of the principal. Here, the manager wants to do excellent with the corporation assets. The theory states that administrators are excellent servants of the enterprise and diligently work to attain high ecosystems of corporate profit and shareholders returns" (Davis et al., 1997). Thus, the theory holds that there is no inherent, general problem of executive motivation. Davis et al. (1997) and Donaldson & Davis (1991) further argues that managers are motivated by intrinsic satisfaction and challenging tasks, and therefore they are restrained from misappropriating company resources. It advocates that manager are likely to exercise responsibility to gain recognition from their peers and bosses (Davis, 1991). Henceforth, they take responsibility for shareholders' interests and themselves (Donaldson & Davis 1991).

While the agency theory has its etymology in economics, the servant theory has emerged from psychology and sociology. The stewardship theory assumes that the manager will make decisions in the organisation's best interest, putting collectivist options above self-service options. This type of persona is motivated by doing what's suitable for the organisation because they believe they will ultimately benefit when it thrives.

Therefore, managers must be empowered to participate in board activities as executive directors. Therefore, this consequent reallocation of control from shareholders to management is essential in maximising shareholder returns. For this reason, stewardship theory leans on promoting dominant insider boards.

2.2.6 The Resource-Dependency Theory

Johnson, Daily and Ell strand (1996) and Zahra and Pearce (1989), Resource Dependence Theory is frequently used in research on board of directors. Furthermore, the theory is supported more often than any other board perception. Even though Resource Dependence Theory is significantly reinforced in practice, agency theory is a more usually used theory to study boards of directors (Hillman, Withers & Collins, 2009). Nonetheless, according to empirical data, the Resource dependence Theory is a more successful tool for understanding boards (Hillman et al., 2009).

The resource dependence theory focuses on the board's role in engaging with the external environment to access critical resources. Firms, therefore, need to establish better access to resources required from the external environment and are thus likely to add more outside directors to their board to provide this access (Ayuso & Argandona 2007, Pfeffer & Salancik 1978). The critical role of the board is its ability to link to significant resources that it needs to maximise performance (Salancik & Pfeffer, 1974). The board is considered a vital resource for the firm because of its association with the external environment. According to resource dependence theory, the board composition may be seen as an answer to the external challenges that a corporate may face (Salancik & Pfeffer, 1974). In any environment, resources may be scarce, and links with other stakeholders and organisations are exceptional. Board members who can tap into outside links and networks are lovely in conditions of scarcity (Salancik & Pfeffer, 1974). Similarly, inside directors may possess better information on the firm's internal operations than outside directors, which effectively helps the board evaluate managers (Baysinger & Hoskisson 1990).

Thus, dependency theory favours an ideal balance by acknowledging the importance of both outsides and inside directors in bringing in essential links and resources to boards. Resource dependence theory focuses on significant strategic actions of organisations that influence and control interdependencies with other organisations in their environment.

The resource scarcity of organisations mainly influences interdependencies as they cannot produce all the resources they need. Consequently, they depend on external resources to survive and increase their business prospects. Resource dependence theory posits that boards have a much more significant role than simply monitoring firm management (Chakrabarty & Bass, 2014). It is imperative to establish environmental linkages between the firm and outside resources and its directors to connect the firm with external factors and secure scarce resources.

According to resource dependence theory, organisations that operate in the same environment will compete for the same finite resources (Chakrabarty & Bass, 2014). Boards of directors are expected to maintain external networks such that it benefits the organisation in attaining access to these limited resources (Chakrabarty & Bass, 2014). The organisation's achievement is thus dependent on the board's ability to build relevant networks in the crucial industries to gain access to resources that the firm needs to operate. Outside directors primarily provide the necessary resources to deal with external factors. When boards are linked, there are some benefits for the firm, like provision of specific resources, such as expertise and advice from individuals with experience in a variety of strategic areas; channels for communicating information between external organisations and the firm; aids in obtaining commitments or support from essential elements outside the firm; and legitimacy (Madhani, 2017).

2.2.7 Institutional Theory

Institutional Theory refers to the social, regulatory, political, and infrastructural and any external norms that affect the organisation and are not in its control. It is "a voice of resistance to this culture of short-sightedness, offers guides to cogitate about corporate accountability, and usher question on the goal of maximising profits or returns on capital" (Selznick, 1996). Institutional theory is on the deeper and more resilient aspects of social structure. It contemplates how customs forms, including systems, rules, and routines, become authoritative guidelines for social behaviour.

Institutional theory refers to external pressures that impact the board's decision-making processes. These external pressures influence the board to initiate additional activities or initiatives beyond simply maintaining the organisation's status quo; instead, they speak to what factors will impact its sustainability within its environment (Hung, 1998). The key argument of institutional theory is that "organisations are constrained by social rules and follow taken-for-granted conventions that shape their form and practice" (Hung, 1998). Therefore, a board's monitoring and advising role is closely linked to the board's ability to respond to institutional pressures, reflecting the external environment in which the organisation operates (Hung, 1998). As part of understanding the external environment, the board of directors must identify institutional voids and pressures to advise the organisation.

Table 2.1 : Summary of theories and views of role players in corporate governance

Abbildung in dieser Leseprobe nicht enthalten

Source: Malin (2019)

Identifying the institutional gaps, the board can better strategies on circumventing these voids (Hung, 1998). Directors are 'effective' when they can locate these institutional voids and 'skilled' when they can offer strategies to navigate these in a way that promotes the organisation's success (Malin, 2019).

2.2.8 Theoretical Framework

The discourse is based on variables of board effectiveness, the intervening variable of the impact of Covid, constructs on factors that contribute to board effectiveness, cohesion, technical skills, good relations, and good governance. The effects of factors that influence board effectiveness, leadership structure. The variables of firm performance, improved service delivery, sustainability and dividends are all unpacked in this discourse as in figure 2.2. It is enunciated that when one embarks on research, the journey to develop new knowledge begins in a particular field.

[...]

• Universidad: University of Namibia
• Curso: Masters in Finance
• Calificación: A
• Autores: David Rewayi Mpunwa (Autor), Martha Ndinelao Simasiku (Autor)
• Año de publicación: 2022
• Páginas: 121
• No. de catálogo: V1173971
• ISBN (PDF): 9783346594600
• ISBN (Libro): 9783346594617
• Idioma: Inglés
• Etiqueta: board, effectiveness, namibia’s, state, owned, enterprise