Denel is top SOE in terms of corporate governance

The findings were based on publicly available information covering 96 indicators of good corporate governance according to a research report produced by the Centre for Corporate Governance at the University of Stellenosch and released on Thursday, 11 October 2012.

The research covered other state-owned-enterprises including Transnet‚ Telkom‚ the South African Post Office and the Development Bank of Southern Africa.

Researcher Lynn Mc Gregor said the factors considered included:

• The composition of the boards and their committees;
  
• The functioning of the boards and their ability to give strategic direction;
  
• Accountability‚ particularly financial and audits;
  
• The relationship of enterprises with stakeholders‚ particularly government;
  
• Social and environmental factors;
  
• The quality of reporting.

McGregor said generally state-owned enterprises under-performed relative to the private sector with regard to corporate governance though they were generally better with regard to social aspects.

Advisor to the project Nozizwe Mdlala-Routledge raised concerns about the post-facto oversight by parliament of state-owned enterprises and about the process of appointing board members.

McGregor said government needed to be much more professional in the appointment of directors to the boards of state-owned enterprises.

She cautioned however that there were about 600 state-owned enterprises and entities so it was difficult to generalise.

Transparency and disclosure of information were critical‚ she said.