Implementation of the public entities corporate governance Act (Chapter 10.31) by state owned enterprises (SOEs) in Zimbabwe

Abstract

The study sought to investigate the effectiveness of the implementation of corporate governance legislation with specific focus being on the Public Entities Corporate Governance (PECG) Act (Chapter 10:31) of May 2018 by State Owned Enterprises in Zimbabwe. The research was inspired by the continued and endless occurrence of a plethora of corporate scandals in State Owned Entities. The objectives of the research were to investigate the implementation status of the PECG Act that is measuring the extent of compliance by SOEs to the provisions of this corporate governance legislation. The study also sought to establish if the PECG Act is a “one size fits all” kind of legislation given the fact that such SOEs are found in different categories like banking, agriculture, education, social services, engineering and energy. The study adopted mainly a qualitative research approach with questionnaires and interviews being used as data collection instruments. Data for analysis was collected from the management and board members of various categories of SOEs. The population of the study was 107 and the sample was 82. 70 responded to the questionnaire making an 85% response rate while 25 key informants were interviewed. Research findings showed that the presence of corporate governance scandals in SOEs affected the way these organizations operate. The study concluded that PECG Act is a one size fits all kind of legislation although there is a great disconnection between provisions of PECG Act and practice. The study recommends that more corporate governance workshops be done and provisions of an adequate remuneration for executives and non- executive directors of SOEs to match their qualifications and expertise. Board independence should be maintained and transparent appointment of members into public offices as well as the privatization of less performing non-essential SOEs.