Analysing corporate governance in local government

Abstract

This research report is focused on determining whether the principles of corporate governance are applied adequately in the local government environment in Gauteng. The researcher is also seeking to explore the extent to which board members are aware of corporate governance principles that could lead to board effectiveness. Another issue the researcher would like address is whether corporate governance and board effectiveness could be measured reliably. The study commences with an analysis of the need for, and the importance, foundation and benefits of, a study on the application of, and adherence to, corporate governance principles in local government. Some of the key issues discussed are the legislation and the views of the various stakeholders. The objectives and limitations of the study are highlighted and discussed. In addition, an extensive literature review has been undertaken to illustrate the various ways of thinking about corporate governance. From a South African perspective, much attention has been focused on the King II report on corporate governance. In addition to the King II report, key literature review issues discussed are board effectiveness and corporate governance in emerging markets. The business model of the City of Johannesburg is integrated into the literature review from a governance perspective. The research methodology is delineated clearly, and the concepts are explained. Alternative methodologies for the research are mentioned, and the reasons for not using them are given. The research results are presented with the aid of statistical analysis, and even though they are convincing, they are not entirely what the researcher e' xpected. The researcher highlights, and offers some recommendations on1 , a few alarming issues raised by the research results. Lastly, a recommendation is made on potential focus areas for future research into corporate governance in the local government environment.