An investigation into the impact of board characteristics and variables on the performance of state-owned enterprises (SOEs) in Namibia
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Date
2025
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University of Namibia
Abstract
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
Description
A dissertation submitted in fulfilment of the requirements for the Degree of Doctor of Philosophy in Public Administration
Keywords
Corporate governance, Board of directors, Agency theory, State-owned enterprises, Board variables, SOE performance, Stakeholder theory, Stewardship theory, Board effectiveness, Corporate financial performance, Resource dependency theory, Namibia, University of Namibia