The Effect of Corporate Governance Practices on the Performance of State-Owned Enterprises in Zimbabwe: Challenges and Opportunities
Abstract
State-Owned Enterprises (SOEs) represent a crucial component of the national economy in
Zimbabwe, yet they are beset by systemic operational challenges that affect their performance
and reputation. There have been concerns about the effectiveness of their corporate governance
systems and how these impact the performance of the enterprise. While there is some scholarship on corporate governance in public sector entities, little has been done to interrogate the impact of corporate governance practices on the performance of SOEs in Zimbabwe. Therefore, this study, using qualitative content analysis, sought to assess the impact of corporate governance practices on the performance of state-owned enterprises in Zimbabwe. The X-inefficiency theory, Agency Theory and the Resource-Based View (RBV) constituted the theoretical framework of the study. Qualitative content analysis of several published empirical information on corporate governance in state-owned enterprises. Findings from study highlighted rampant corruption within state owned entities. Findings highlighted that there are poor corporate governance practices in these institutions fuelled by weak institutional frameworks, political patronage and the lack of effective oversight mechanisms among other factors. The absence of strong corporate governance has resulted in poor performance of SOEs. As a result, service delivery has become very poor. Findings highlighted that there is need to evaluate potential barriers to the adoption of effective corporate governance practices such as policy, legislation, attitudinal factors, capacity building, resources among others. The effective management of these barriers is crucial for promoting the adoption and implementation of best practices in SOEs. However, there remains the need for studies that focus on effective adoption and implementation methodologies of these strategies.
