Exploring the impact of  firm-level corporate governance challenges on Sustainable Development Goals (SDGs) in a developing economy

Tendai Makwara

doi:10.46336/ijbesd.v5i4.740

Exploring the impact of firm-level corporate governance challenges on Sustainable Development Goals (SDGs) in a developing economy

Tendai Makwara

Abstract

The impact of firm-level corporate governance challenges on sustainable development requires attention, particularly in developing countries. This qualitative study explores factors contributing to South African firms' poor CG performance and the implications of firm-level CG challenges towards attaining SDGs in South Africa. It employs a rapid review methodology to search and review selected articles systematically. Content analysis is used to draw findings. Results reveal that historical, economic, lack of critical scholarship and weak regulatory enforcement and oversight factors affect South African corporate governance practices. Notably, a lack of reform in the corporate governance architecture underpins most of the challenges firms experience regarding corporate governance practices. These results can be linked to slow progress towards realising sustainable development goals (SDG) targets from achieving socioeconomic equality, board diversity, jobs, poverty alleviation and justice for all. This study contributes to scholarship on the intersectionality between CG, SDGs, and existing challenges that restrict the business sector from fully contributing to national development. In South Africa, the study also reviews progress towards strengthening the CG fabric in the post-apartheid era.

Keywords

Corporate governance; Sustainable development goals; Agency theory; South Africa

Full Text:

PDF

References

Afolab, A. A. (2015). Examining Corporate Governance Practices in Nigerian and. European Journal of Accounting Auditing and Finance Research, 3(1), 10–29.

Andrea Valente, & David Atkinson. (2019). Sustainability in Business: A Millennials’ Perspective. Journal of Modern Accounting and Auditing, 15(6). https://doi.org/10.17265/1548-6583/2019.06.002

Andreasson, S. (2011). Understanding corporate governance reform in south africa: Anglo-american divergence, the king reports, and hybridization. Business and Society, 50(4), 647–673. https://doi.org/10.1177/0007650309332205

Areneke, G., Khlif, W., Kimani, D., & Soobaroyen, T. (2022). Do corporate governance codes matter in Africa? In Research Handbook on Corporate Board Decision-Making (pp. 273–304).

Babarinde, O. A. (2009). Bridging the economic divide in the Republic of South Africa: A corporate social responsibility perspective. Thunderbird International Business Review, 51(4), 355–368. https://doi.org/10.1002/tie.20272

Bhagat, S., & Bolton, B. (2008). Corporate Gov and Firm Performance. Journal of Corporate Finance, 14(3), 257–283. https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.180.5811&rep=rep1&type=pdf

Bhorat, H., Lilenstein, K., Oosthuizen, M., & Thornton, A. (2020). Structural Transformation, Inequality, and Inclusive Growth in South Africa. In WIDER Working Paper (Vol. 50, Issue A). UNU-WIDER. https://doi.org/10.35188/UNU-WIDER/2020/807-8

Bracking, S. (2013). A qualitative reframing of private sector corruption: Considerations from the natural resource sectors in South Africa. U4 Issue, 2013(7).

https://www.researchgate.net/publication/265731605

Buniamin, S., Jaffar, R., Ahmad, N., & Johari, N. H. (2022). The Role of Corporate Governance in Achieving SDGs among Malaysian Companies. European Journal of Sustainable Development, 11(3), 326. https://doi.org/10.14207/ejsd.2022.v11n3p326

Chigudu, D. (2018). Corporate governance in Africa’s public sector for sustainable development: The task ahead. The Journal for Transdisciplinary Research in Southern Africa, 14(1). https://doi.org/10.4102/td.v14i1.512

Dreyer, J. A., Viviers, S., & Mans-Kemp, N. (2021). Reflecting on compliance with broad-based black economic empowerment codes of good practice: Trends and suggestions. South African Journal of Business Management, 52(1), 11. https://doi.org/10.4102/sajbm.v52i1.1963

Frey, M., & Sabbatino, A. (2018). The Role of the Private Sector in Global Sustainable Development: The UN 2030 Agenda (pp. 187–204). Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-63480-7_10

Gan Integrity. (2020). South Africa: country risk report. South Africa Country Risk Report, 4, 1–52. https://www.ganintegrity.com/country-profiles/south-africa/

Haby, M. M., Barreto, J. O. M., Kim, J. Y. H., Peiris, S., Mansilla, C., Torres, M., Guerrero-Magaña, D. E., & Reveiz, L. (2024). What are the best methods for rapid reviews of the research evidence? A systematic review of reviews and primary studies. Research Synthesis Methods, 15(1), 2–20. https://doi.org/10.1002/jrsm.1664

Haywood, L. K., & Boihang, M. (2021). Business and the SDGs: Examining the early disclosure of the SDGs in annual reports. Development Southern Africa, 38(2), 175–188.

https://doi.org/10.1080/0376835X.2020.1818548

Hunt, V., Prince, S., Dixon-Fyle, S., & Yee, L. (2018). Delivering through Diversity. Mckinsey & Company, January, 42. https://www.mckinsey.com/~/media/McKinsey/Business Functions/Organization/Our Insights/Delivering through diversity/Delivering-through-diversity_full-report.ashx%0Ahttps://www.ifsskillnet.ie/wp-content/uploads/2019/01/Delivering-Through-Diversity.pdf%0Aht

Jamali, D., Safieddine, A. M., & Rabbath, M. (2008). Corporate governance and corporate social responsibility synergies and interrelationships. Corporate Governance: An International Review, 16(5), 443–459. https://doi.org/10.1111/j.1467-8683.2008.00702.x

Martínez-Ferrero, J., & García-Meca, E. (2020). Internal corporate governance strength as a mechanism for achieving sustainable development goals. Sustainable Development, 28(5), 1189–1198. https://doi.org/10.1002/sd.2068

Mathiba, G. (2020). Corruption, Public Sector Procurement and COVID-19 in South Africa: Negotiating the New Normal. Journal of Public Administration Research, 55(4), 1–4. https://hdl.handle.net/10520/ejc-jpad-v55-n4-a5

Miles, L., & Jones, M. (2009). The Prospects for Corporate Governance Operating as a Vehicle for Social Change in South Africa. Deakin Law Review, 14(1), 53. https://doi.org/10.21153/dlr2009vol14no1art131

Mishra, R. K., & Kapil, S. (2016). Study on corporate governance mechanisms. International Journal of Indian Culture and Business Management, 12(2), 179. https://doi.org/10.1504/ijicbm.2016.074480

Mlambo, V. H., & Masuku, M. M. (2020). Governance, corruption and COVID-19: The final nail in the coffin for South Africa’s dwindling public finances. Journal of Public Administration, 55(3), 549–565.

Montiel, I., Cuervo-Cazurra, A., Park, J., Antolín-López, R., & Husted, B. W. (2021). Implementing the United Nations’ Sustainable Development Goals in international business. Journal of International Business Studies, 52(5), 999–1030. https://doi.org/10.1057/s41267-021-00445-y

Muzata, T., & Murozva, G. (2022). Executive Compensation Schemes: Accelerants of Agency and Corporate Governance Problems in South Africa. The African Journal of Governance and Development (AJGD), 11(1.2), 328–350. https://doi.org/10.36369/2616-9045/2022/v11si2a7

Naciti, V., Cesaroni, F., & Pulejo, L. (2022). Corporate governance and sustainability: a review of the existing literature. Journal of Management and Governance, 26(1), 55–74. https://doi.org/10.1007/s10997-020-09554-6

Negash, M., & Lemma, T. T. (2020). Institutional pressures and the accounting and reporting of environmental liabilities. Business Strategy and the Environment, 29(5), 1941–1960. https://doi.org/10.1002/bse.2480

Njokweni, P. N. (2019). Copyright and Citation Considerations for This Thesis/ Dissertation. In A Critical Analysis of the Social and Ethics Committee Function when It Is Monitoring the Company’s Activities in Respect of Corruption. https://ujcontent.uj.ac.za/vital/access/manager/Index?site_name=Research Output

Nyakurukwa, K., & Seetharam, Y. (2023). Corporate governance in a weak legal environment: a systematic review focusing on Zimbabwe. Qualitative Research in Financial Markets, 15(2), 319–335. https://doi.org/10.1108/QRFM-01-2022-0012

Okpara, J. O. (2010). Perspectives on Corporate Governance Challenges in a Sub-Saharan African Economy. Journal of Business & Policy Research, 5(1), 110–122. http://www.researchgate.net/publication/228433082%5CnPerspectives

Padayachee, V. (2013). Article Corporate governance in South Africa: from “Old Boys Club” to “Ubuntu”? Transformation: Critical Perspectives on Southern Africa, 81(1), 260–290.

Planning, C. N. (2019). South Africa’s Implementation of the 2030 Agenda for Sustainable Development ‘Solving Complex Challenges Together.

Rashed, A. H., & Shah, A. (2021). The role of private sector in the implementation of sustainable development goals. In Environment, Development and Sustainability (Vol. 23, Issue 3, pp. 2931–2948). Springer Science and Business Media B.V. https://doi.org/10.1007/s10668-020-00718-w

Sartor, M. A., & Beamish, P. W. (2020). Private Sector Corruption, Public Sector Corruption and the Organizational Structure of Foreign Subsidiaries. Journal of Business Ethics, 167(4), 725–744. https://doi.org/10.1007/s10551-019-04148-1

Smela, B., Toumi, M., Świerk, K., Francois, C., Biernikiewicz, M., Clay, E., & Boyer, L. (2023). Rapid literature review: definition and methodology. In Journal of Market Access and Health Policy (Vol. 11, Issue 1). https://doi.org/10.1080/20016689.2023.2241234

Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines. Journal of Business Research, 104, 333–339. https://doi.org/10.1016/j.jbusres.2019.07.039

United Nations. (2015). Transforming our world: the 2030 Agenda for Sustainable Development | Department of Economic and Social Affairs. United Nations General Assembly. https://sdgs.un.org/publications/transforming-our-world-2030-agenda-sustainable-development-17981

Van Zyl, M., & Mans-Kemp, N. (2020). Reflecting on Corporate Governance in South Africa: Lessons Learned and the Way Forward. Southern African Business Review, 24. https://doi.org/10.25159/1998-8125/6654

Viviers, S., Mans-Kemp, N., & Fawcett, R. (2017). Mechanisms to promote board gender diversity in South Africa. Acta Commercii, 17(1), 2413–1903. https://doi.org/10.4102/ac.v17i1.489

Wanyama, S., Burton, B., & Helliar, C. (2013). Stakeholders, accountability and the theory-practice gap in developing nations’ corporate governance systems: Evidence from Uganda. Corporate Governance (Bingley), 13(1), 18–38. https://doi.org/10.1108/14720701311302396

Waweru, N. M. (2014). Determinants of quality corporate governance in Sub-Saharan Africa: Evidence from Kenya and South Africa. Managerial Auditing Journal, 29(5), 455–485.

https://doi.org/10.1108/MAJ-07-2013-0897

West, A. (2006). Theorising South Africa’s corporate governance. Journal of Business Ethics, 68(4), 433–448. https://doi.org/10.1007/S10551-006-9033-5/METRICS

DOI: https://doi.org/10.46336/ijbesd.v5i4.740