Valley International Journal Digital Library

VIJ Digital library
Articles

The Impact of Corporate Governance Practices On Corporate Growth and Sustainability in Botswana

PDF
  • Stancey Tumiso Nkgowe,
  • Lourenda Tadiwa Camille Bindu,
  • Concepcion Bengono Ncogo Okori
Stancey Tumiso Nkgowe
School Of Business Administration, Zhejiang Gongshang University
Bio
Lourenda Tadiwa Camille Bindu
School of Tourism and Urban Rural Planning, Zhejiang Gongshang University, 310018
Bio
Concepcion Bengono Ncogo Okori
School of Business Administration, Shanghai university of Science and Technology
Bio
Published in : International Journal of Scientific Research and Management (IJSRM) , Vol. 12 No. 09 (2024)

Submission to VIJ 2024-09-20

Keywords

  • Corporate Governance, Board Diversity, Financial Disclosure, Independent Director, Corporate Sustainability

Copyright (c) 2024 Stancey Tumiso Nkgowe, Lourenda Tadiwa Camille Bindu, Concepcion Bengono Ncogo Okori

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Corporate governance is an essential part of modern corporate strategy and a framework that guarantees accountability, fairness as well transparency in collaboration with the organisation. It governs the corporate performance and sustainability by regulating relationships of management with board, shareholders & stakeholders. Bringing the governance practices of its Botswana member firms in-line with international standards while also meeting local needs is a unique challenge that arises as an emerging market. This study aims to investigate the corporate governance practices such as board diversity, financial disclosure and independent director of a board in promoting further growth in Botswana. Descriptive statistics showed that there were low levels of governance within the sample firms; and many had positive relationships between their different governance factors as well as corporate sustainability and performance. The findings from the regression analysis indicated that board diversity, financial disclosure, and board independence have a significant positive effect on corporate sustainability and performance. These results underline the necessity of implementing effective governance mechanisms in realizing sustainable corporate expansion.

PDF

References

  1. Aguilera, R. V., Judge, W. Q., & Terjesen, S. A. (2018). Corporate governance deviance. Academy of Management Review, 43(1), 87-109.
  2. } Aksoy, M., Yilmaz, M. K., Tatoglu, E., & Basar, M. (2020). Antecedents of corporate sustainability performance in Turkey: The effects of ownership structure and board attributes on non-financial companies. Journal of Cleaner Production, 276, 124284.
  3. Al-ahdal, W. M., Alsamhi, M. H., Tabash, M. I., & Farhan, N. H. (2020). The impact of corporate governance on financial performance of Indian and GCC listed firms: An empirical investigation. Research in International Business and Finance, 51, 101083.
  4. Bansal, S., Lopez-Perez, M. V., & Rodriguez-Ariza, L. (2018). Board independence and corporate social responsibility disclosure: The mediating role of the presence of family ownership. Administrative Sciences, 8(3), 33.
  5. Bendickson, J., Muldoon, J., Liguori, E. W., & Davis, P. E. (2016). Agency theory: background and epistemology. Journal of Management History.
  6. Bhagat, S., & Bolton, B. (2019). Corporate governance and firm performance: The sequel. Journal of Corporate Finance, 58, 142-168.
  7. Bhatt, P. R., & Bhatt, R. R. (2017). Corporate governance and firm performance in Malaysia. Corporate Governance: The international journal of business in society.
  8. Changezi, N. I., & Saeed, A. (2013). Impact of corporate governance framework on the organizational performance. Journal of Management Policies and Practices, 1(2), 1-8.
  9. ]8] Chinoperekweyi, J., Makumbe, K., & Chundu, T. (2020). Reframing corporate governance orientation in an era of epochal change. Organization Development Journal, 38(4), 85-100.
  10. Crifo, P., Escrig-Olmedo, E., & Mottis, N. (2019). Corporate governance as a key driver of corporate sustainability in France: The role of board members and investor relations. Journal of Business Ethics, 159(4), 1127-1146.
  11. DesJardine, M., Bansal, P., & Yang, Y. (2019). Bouncing back: Building resilience through social and environmental practices in the context of the 2008 global financial crisis. Journal of management, 45(4), 1434-1460.
  12. FAKIR, A., & JUSOH, R. (2020). Board gender diversity and corporate sustainability performance: Mediating role of enterprise risk management. The Journal of Asian Finance, Economics, and Business, 7(6), 351-363.
  13. Freeman, R. E., & Dmytriyev, S. (2017). Corporate social responsibility and stakeholder theory: Learning from each other. Symphonya. Emerging Issues in Management(1), 7-15.
  14. Freudenreich, B., Lüdeke-Freund, F., & Schaltegger, S. (2020). A stakeholder theory perspective on business models: Value creation for sustainability. Journal of Business Ethics, 166(1), 3-18.
  15. Gehringer, T. (2021). Corporate foundations as hybrid organizations: A systematic review of literature. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 32(2), 257-275.
  16. Gomez, L. E., & Bernet, P. (2019). Diversity improves performance and outcomes. Journal of the National Medical Association, 111(4), 383-392.
  17. Hassan, R., & Marimuthu, M. (2018). Contextualizing comprehensive board diversity and firm financial performance: Integrating market, management and shareholder’s perspective. Journal of Management & Organization, 24(5), 634-678.
  18. Iqbal, S., Nawaz, A., & Ehsan, S. (2019). Financial performance and corporate governance in microfinance: Evidence from Asia. Journal of Asian Economics, 60, 1-13.
  19. Jackson, G., Bartosch, J., Avetisyan, E., Kinderman, D., & Knudsen, J. S. (2020). Mandatory non-financial disclosure and its influence on CSR: An international comparison. Journal of Business Ethics, 162(2), 323-342.
  20. Jones, T. M., Harrison, J. S., & Felps, W. (2018). How applying instrumental stakeholder theory can provide sustainable competitive advantage. Academy of Management Review, 43(3), 371-391.
  21. Josiah, J., Themba, G., & Matenge, T. M. (2016). Corporate governance in Botswana: Exploring developments and compliance. Botswana Journal of Business, 9(1), 1-20.
  22. Kalyani, S., Mathur, N., & Gupta, P. (2019). Does Corporate Governance Affect the Financial Performance and Quality of Financial Reporting of Companies? A Study on Selected Indian Companies. In Business Governance and Society (pp. 105-125): Springer.
  23. Kocmanová, A., Pavláková Dočekalová, M., Škapa, S., & Smolíková, L. (2016). Measuring corporate sustainability and environmental, social, and corporate governance value added. Sustainability, 8(9), 945.
  24. Laskar, N., & Maji, S. G. (2018). Disclosure of corporate sustainability performance and firm performance in Asia. Asian Review of Accounting.
  25. Lu, L. W. (2020). The moderating effect of corporate governance on the relationship between corporate sustainability performance and corporate financial performance. International Journal of Disclosure and Governance, 1-14.
  26. Magang, T., & Magang, V. G. (2016). Corporate Governance and Compliance in Botswana: Issues and Challenges. Journal of Research in Business, Economics and Management (JRBEM), 7(1), 1041-1061.
  27. Mahmood, Z., Kouser, R., Ali, W., Ahmad, Z., & Salman, T. (2018). Does corporate governance affect sustainability disclosure? A mixed methods study. Sustainability, 10(1), 207.
  28. Matenge, T. M., Themba, G., & Josiah, J. (2016). Corporate governance in Botswana: exploring developments and compliance.
  29. Mbekomize, C. J., & Nametsegang, L. W.-D. A. (2019). The Impact of Corporate Governance on Corporate Social Responsibility Disclosures: Evidence from Botswana Stock Exchange.
  30. Mokwakwa, N. (2021). Corporate social responsibility in a diamond-mining company in Botswana. Corporate Citizenship: Business and Society in Botswana, 227-254.
  31. Molla, M. S., Ibrahim, Y., Ishak, Z., & Malaysia, U. (2019). RELATIONSHIP BETWEEN BOARD DIVERSITY, CORPORATE SUSTAINABILITY PRACTICES AND FINANCIAL PERFORMANCE OF FIRMS. AND SUSTAINABLITY, 22.
  32. Monkelbaan, J. (2019). Governance for the sustainable development goals. Singapura: Spinger.
  33. Montero, A. G., & Le Blanc, D. (2019). The role of external audits in enhancing transparency and accountability for the Sustainable Development Goals.
  34. Motshegwa, B., Mooketsane, K., & Bodilenyane, K. (2017). The slip-ups of corporate governance in Botswana Public Enterprises.
  35. Naciti, V. (2019). Corporate governance and board of directors: The effect of a board composition on firm sustainability performance. Journal of Cleaner Production, 237, 117727.
  36. Naciti, V., Cesaroni, F., & Pulejo, L. (2022). Corporate governance and sustainability: A review of the existing literature. Journal of Management and Governance, 1-20.
  37. Nakpodia, F., Adegbite, E., & Ashiru, F. (2023). Corporate governance regulation: a practice theory perspective. Paper presented at the Accounting Forum.
  38. Neville, F., Byron, K., Post, C., & Ward, A. (2019). Board independence and corporate misconduct: A cross-national meta-analysis. Journal of Management, 45(6), 2538-2569.
  39. Ngo, M. T., Van Pham, T. H., & Luu, T. T. T. (2019). Effect of board diversity on financial performance of the Vietnamese Listed Firms. Asian Economic and Financial Review, 9(7), 743-751.
  40. Ortas, E., Álvarez, I., & Zubeltzu, E. (2017). Firms’ board independence and corporate social performance: a meta-analysis. Sustainability, 9(6), 1006.
  41. Ozdemir, O. (2020). Board diversity and firm performance in the US tourism sector: The effect of institutional ownership. International Journal of Hospitality Management, 91, 102693.
  42. Panayi, E., Bozos, K., & Veronesi, G. (2021). Corporate governance'bundles' and firm acquisitiveness. Corporate Governance: An International Review, 29(4), 402-426.
  43. Panda, B., & Leepsa, N. (2017). Agency theory: Review of theory and evidence on problems and perspectives. Indian Journal of Corporate Governance, 10(1), 74-95.
  44. Paniagua, J., Rivelles, R., & Sapena, J. (2018). Corporate governance and financial performance: The role of ownership and board structure. Journal of Business Research, 89, 229-234.
  45. Pereira, A. F. A., Stocker, F., Mascena, K. M. C. d., & Boaventura, J. M. G. (2020). Corporate Social Performance and Financial Performance in Brazilian Companies: Analysis of the Influence of Disclosure. BBR. Brazilian Business Review, 17(5), 540-558.
  46. Raimo, N., Vitolla, F., Marrone, A., & Rubino, M. (2020). Do audit committee attributes influence integrated reporting quality? An agency theory viewpoint. Business Strategy and the Environment.
  47. Rashid, A. (2018). The influence of corporate governance practices on corporate social responsibility reporting. Social Responsibility Journal, 14(1), 20-39.
  48. Shi, W., Connelly, B. L., & Hoskisson, R. E. (2017). External corporate governance and financial fraud: Cognitive evaluation theory insights on agency theory prescriptions. Strategic Management Journal, 38(6), 1268-1286.
  49. Suttipun, M. (2018). The influence of corporate governance, and sufficiency economy philosophy disclosure on corporate financial performance. Asia-Pacific Journal of Business Administration.
  50. Utami, H. N., Cahyana, B. E., Nimran, U., & Iqbal, M. (2020). Organizational transformation as a determinant of corporate hospitality and its effect on corporate sustainability. International Trade, Politics and Development.
  51. Weber, O. (2017). Corporate sustainability and financial performance of Chinese banks. Sustainability Accounting, Management and Policy Journal.
  52. Zhang, F., & Li, D. (2019). Multiple linear regression-structural equation modeling based development of the integrated model of perceived neighborhood environment and quality of life of community-dwelling older adults: A cross-sectional study in Nanjing, China. International journal of environmental research and public health, 16(24), 4933.