A framework for incorporating implementation indicators of corporate governance for municipalities in South Africa

Pages581-593
DOIhttps://doi.org/10.1108/CG-11-2016-0216
Date26 February 2018
Published date26 February 2018
AuthorPeter Masegare,Mpho Ngoepe
A framework for incorporating
implementation indicators of corporate
governance for municipalities in
South Africa
Peter Masegare and Mpho Ngoepe
Abstract
Purpose This paper aims to develop a framework for incorporating implementation indicators of
corporate governancefor municipalities in South Africa.In South Africa, there is a corporate governance
framework (King III report) that is regardedas a seminal work applicable to both the public and private
sectors. Despite its existence,municipalities still struggle to provide servicesto the citizens due to poor
implementation. The poor corporate governance implementation in municipalities led to several issues
such as loss of credibility for local government, little interests from investors to invest in municipalities,
service delivery protests fromcommunities, maladministration and unexpected change of leadershipin
municipalitieswithout succession planningin South Africa.
Design/methodology/approach The study conducted literaturereview to demonstrate the need for a
frameworkto implement corporate governancein South Africa.
Findings It is evident from the study that the municipal sector could improve its performance and
practices of corporate governance, if the underpinning framework is adopted and implemented as a
sector framework. The integration of governance elements during the development of the municipal
sector integrated development plan (IDP) will facilitate a coherent base for good governance
implementationpractices.
Research limitations/implications This research would go a long wayin bringing out the anomalies
that paralysemunicipalities, the root causes of inefficiencyand possible ways to rectify them.
Practical implications This study offers a framework that can help the local government sector to
improve on service delivery.Implementation of the framework can also assist municipalities in obtaining
clean auditsfrom the supreme audit institutionsin their respective countries.
Social implications The study has a hugesocial impact as it would help municipal officialstake notice
of the issuesraised and act accordingly thus improvingthe life of citizenry.
Originality/value This study adds value to the existing theoreticaland conceptual issues that form the
ongoing discourse on the implementation of corporate governance in local government, especially in
South Africa,as the country is characteristic by corruptionand maladministration.
Keywords Board of directors, Risk management, Corporate governance, Audit committees
Paper type Conceptual paper
Introduction and background
The prospects of the corporate governance implementation framework and control system
within any organisation cannot be overemphasised. If an organisation is to gain a
competitive advantage within its operating environment, there should be systems that are
geared towards guiding the corporate governance implementation framework to assist the
board in running the business. This sentiment is echoed by KPMG (2011, p. 31) when
pointing out that the concept of the good corporate governance framework relies heavily on
Peter Masegare i s based at
the GraduateSchool of
Business and Lea dership,
Universityof KwaZulu-Natal,
WestvilleCampus Westville,
Durban, South Africa.
Mpho Ngoepe is Associate
Professor at the
Department of Information
Science, University of
South Africa, Pretoria,
South Africa.
Received 16 November 2016
Revised 15 July 2017
Accepted 3 February 2018
DOI 10.1108/CG-11-2016-0216 VOL. 18 NO. 4 2018, pp. 581-593, ©Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 581

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