Performance of
Namibian SoE’s
A Corporate Governance Perspective
Daniel Motinga
FNB Group Economics
Aligning broad stakeholder interest
 Ensure that firms are run to the benefit of
all stakeholders
 Relationship btw internal governance and
society’s conception of corporate social
accountability
 Ultimately to overcome problems of
agency in terms of the separation of
ownership and control

Corporate Governance Defined
• Strategy
• Direction
• vision
Leadership
Openness
• Disclosure
• Financial and
non-financial
aspects
• Risk aware
• Active risk
management
Sustainability
King III Perspective on Corp Gov

Integrated annual report
◦ Focus on economic, environment and social
spheres
Audit committees
 Internal Audit
 Formal risk management processes

New King III Requirements
Latest Annual Report or Audited Financial
Statements by July 2010
2009
2008.5
latest AFS or AR
2008
2007.5
2007
2006.5
2006
2005.5
2005
1985
1990
1995
2000
2005
Year started
Timely disclosure a challenge for
SoE’s – no consequences
2010
Tax payer support increased

Disclosure of annual financial information
◦ Operational efficiency
◦ Openness and transparency
◦ Timely disclosure on all material matters

Board selection and value add
◦ Contribution to strategic direction

Dependence on tax payer support
◦ Operational sustainability
◦ Going concern status

Ready for Risk based management
◦ Do we have the right skills?
Key unresolved issues

Disclosure should become non-negotiable
◦ Accountability and transparency
◦ Timely, regular and reliable
◦ Financial, environmental and social (triple
bottom-line)

Independence of board of directors
◦ Management and political control

Balanced private & public enterprise
◦ Identify winners and losers
◦ Net contribution to total economy
Food for thought

Size of board and intensity positively impacts
performance
◦ Range of expertise/ merit appointments
◦ Less dominance by CEO

Board meeting frequency does not necessarily
enhance performance
◦ Higher frequency implies crisis

Audit committee characteristics are supportive of
performance
◦ Presence of AC serves as an assurance mechanism to
promote fairness and transparency
◦ Independence of an audit comm’t not significant in
performance enhancement
◦ Frequency of audit comm’t meetings has a positive and
significant impact on performance
Cross Country Research Support
(SA, Ghana, Nigeria, Kenya) – Jour St Ec &
Econometrics, 2008.