Abstract - Exploratory Review of State-Owned Entities: Going Concern Problem

Journal of Reviews on Global Economics

Exploratory Review of State-Owned Entities: Going Concern Problems  Pages 1483-1490

M. Mashele and K.N. Motubatse


DOI: https://doi.org/10.6000/1929-7092.2019.08.131

Published: 31 December 2019


Abstract: The need for effective governance at state-owned entities continues to be emphasised by ongoing revelations of scandals involving pervasive corruption and wasted resources. This paper provides a critical review of state-owned entities, based on the going concern concept, for the period 2014 to 2018. The paper does so by reviewing the standard functions of board committees in the areas of responsibility, competencies, transparency, accountability and performance. The research methodology employed in this article includes content analysis. The paper focuses on the cases of South African Airways, the South African Broadcasting Cooperation, the Passenger Rail Agency of South Africa and Eskom. Thus, this paper reveals that state-owned entities are suffering from weak balance sheets and negative equity; liquidity challenges; negative publicity; unhelpful board dynamics; loss of confidence from key stakeholders; forensic audit reports pointing to corruption, and a failure to recognise that oversight committees are not an end in themselves, but a means to achieve effective governance. The paper further reveals that the challenges facing board committees include political pressure and the lack of continuity and accountability.

Keywords: Board committees, public entities, governance, accountability, going concern.

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