School of Business Management, Governance & Economics

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Browsing School of Business Management, Governance & Economics by Subject "Agency theory"

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    An investigation into the impact of board characteristics and variables on the performance of state-owned enterprises (SOEs) in Namibia
    (University of Namibia, 2025) Mukasa, Felix Mukasa; Riruako, H.
    The study investigates the impact of board characteristics and variables on the performance of state 0wned enterprises in Namibia. SOEs play a crucial role in Namibia’s economic development, providing essential services and contributing to national growth. However, many SOEs face performance challenges, often attributed to governance issues. This research aims to explore how specific board characteristics and variables such as board size, board composition, board independence and diversity influence the operational and financial performance of SOEs. Using a mixed methods approach, the study combines quantitative analysis of data from Namibian SOEs with the qualitative insights from interviews with board members and industry experts. The quantitative component employs regression analysis to assess the relationship between board characteristics and variables and the performance metrics and operational efficiency. The qualitative component provides contextual understanding of the governance dynamics within the SOEs. Preliminary findings suggest that larger boards, comprising of nine (9) or more members, with diverse and independent members tend to perform better as they bring varied perspectives and expertise. However, excessive board size may lead to inefficiencies. The study also highlights the importance of transparency and accountability in board operations, which are critical for improving SOE performance. B9(Board_LeadStruc) + B10(Managerial) + B11(Large_ShareHol) + B12(Board_Compo) + B13(Gender_Div) + B14(Education) + B15(Board_meeting) + e The study displays the regression coefficients findings from the analysis conducted to establish the causal impact of board characteristics on performance of state-owned enterprises. On that basis, the regression equation is shown as: ii SOEs_Performance = -0.344 -0.096(Board_Size) + 0.362(CEO_Duality) + 0.081(NED) + 0.342(Board_Indp) + 0.071(Board_ActvInt) -0.010 (CEO_Tenure) + 0.019(Adit_Comm) + 0.155(Ethic_Cond) + 0.064(Board_LeadStruc) + 0.147(Managerial) + 0.191(Large_ShareHol) + 0.169(Board_Compo) + 0.428(Gender_Div) + 0.669(Education) + 0.170(Board_meeting) + e According to the results depicted by the analysis, the constant has a value of -0.344, which indicates that when there are no boards of directors, performance of state-owned enterprises (SOEs) reduces by 34.4%. Hence, the importance of SOEs to have boards of directors. However, the quality of these boards of directors depends on the board characteristics, which their enhancement influence performance of SOEs. Thus, education exhibit the highest coefficient of 0.669, which signifies a positive impact of education of the boards of directors on performance of the SOEs. In addition, other characteristics show positive small coefficients large shareholders (0.191), board meetings (0.170), board composition (0.169), ethical conduct (0.155), and managerial (0.147)], indicating little positive impacts on performance of SOEs. That is, a 1% enhancement in large shareholders, board meetings, board composition, ethical conduct, and managerial is associated with a corresponding improvement of 19.9%, 17%,16.9%, 15.5%, and 14.7% in performance of SOEs. These results show consensus with other findings (Isk & Soykan, 2013; Soana et al., 2021), which reveal that large shareholders stand a good chance of reducing risks, which enhances the firm’s performance. The results also support the postulations of other studies (Al-Daoud et al., 2016; Eluya et al., 2018), which highlight the essence of board meetings in addressing conflicts and enhance decision-making processes, which maximises the firm’s performance. In exception of the board activity intensity and CEO tenure, the rest of the variables, including the board size, non-executive directors, board leadership structure, and auditing committee indicate very low positive coefficients of 0.096, 0.081, 0.064, and 0.019, respectively. That implies that, when the board size expands by 1%, performance of the SOEs increases by 9.6%. These results align with the findings of earlier studies (Kalsie & Shrivastav, 2016; Mishra & Kapil, 2018), which suggest that there is a notable positive relationship between the size of the board and the success of the enterprise. This indicates that the inclusion of a bigger board with a diverse range of experience and perspectives might be advantageous for the enterprises in developing effective strategies and ultimately improving performance (Li et al., 2021; Murtaza et al., 2018; Orozco et al., 2018). This research will contribute to the existing literature on corporate governance by providing evidence from a developing country context. It will offer practical recommendations for policy makers and stakeholders to enhance the governance framework of SOEs, ultimately aiming to improve their performance and sustainability. Finally, the study will provide recommendations on policy as well as suggestions for future studies