CORPORATE GOVERNANCE AND PERFORMANCE OF STATE-OWNED ENTERPRISES IN GHANA

Rev. Dr. Maxwell Dela Yao Gakpo - Researcher, Trimonde Ghana Limited, Ghana

Ing. Dr. Kenneth Kwaku Ashigbey - Chief Executive Officer, Ghana Chamber of Telecommunications, Ghana

Mercy Kwakye - Lecturer, Department of Accounting & Finance, Pentecost University, Ghana

ABSTRACT

Corporate Governance and its relations with firm performance is the subject of a lot of academic interest. Corporate governance studies in Africa still lags and relatively less researched in the area of State operations. Therefore, this study was conducted to establish whether or not, adherence to good corporate governance practices influences the financial performance of State-Owned Enterprises in Ghana. This quantitative inquiry is anchored on the positivist method. Return on Capital Employed (ROCE) was used as proxy for the financial performance of these State-Owned Enterprises. The presence of an audit committee, gender diversity of boards, board size and the frequency of board meetings were applied as characteristics of corporate governance. Twenty-two (22) SOEs were purposively sampled with data spanning from 2012 to 2016. The study found out that though there were some positive and negative relations between the four independent variables and the accounting performance measures. However, most of the relationships were not statistically significant. Corporate governance did not improve firm performance directly but it required the interaction with other factors to achieve the changes required. The study recommends that other factors of corporate governance should be explored as well as the interrelationships between them in future studies. Most of the objects of these State -Owned Enterprises in Ghana are not primarily profits oriented, so other dependent variables like their impact on citizens and delivery of key performance indicators should also be considered in future research as performance measures.

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