Monitoring and Evaluation for Education and Accountability in Edmund Rice Foundation Australia Nairobi County

Abstract

Purpose: This study examined the relationship between corporate governance attributes and performance of state-owned enterprises through review of literature. The study specifically sought to establish the relationship between corporate governance attributes of accountability, transparency, transformational leadership and stakeholder engagement; and performance of state-owned enterprises with government policy objective as the mediating variable. The study was anchored on Agency, Signalling, Transformational Leadership and Stakeholder Theories to narrow the literature gap.
 Methodology: The study adopted desk research design through reviewing of relevant literature relating to corporate governance attributes and performance of state-owned enterprises. The study also summarized major contributions of significant studies on the relationship between corporate governance and performance. In addition, the study discussed the theoretical and methodological gaps in the reviewed literature on corporate governance and performance for further research.
 Findings: Reviewed primary and secondary literature sources showed that, more transparency allows for greater accountability and contributes to better performance by state-owned enterprises. Further, countries that have been able to improve their corporate governance standards and practices have also been able to improve the business environment for and performance of both private and state-owned companies. In addition, SOEs’ performance is influenced by adoption and implementation of corporate governance practices. However, the difference in financial performance of SOEs may be due to several factors including set government policy objectives that constrain the performance of the SOEs. Moreover, countries with ineffective governance and low accountability continue to experience weak SOE performance, poor delivery of public services, stifled competitiveness and growth including through the crowding-out of private companies and increased opportunities for political patronage and corruption.
 Unique contribution to theory, practice and policy: The study recommended that the principal objective of SOE reforms should be to improve SOEs’ accountability and efficiency by establishing and enforcing adequate reporting of their performance while holding them accountable for reaching or their targets. In addition, the state ownership policy should fully recognize SOE’s responsibilities towards stakeholders and request that SOEs report on their relations with stakeholders. Further, it should make clear any expectations the state has in respect of responsible business conduct by SOE.