Management of non-financial issues of corporate governance at eNdondakusuka municipality.
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Date
2005
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Abstract
This study investigates the implementation of non-financial corporate governance principles at the eNdondakusuka municipality. The study draws largely on the reports of the King Commission of 1994 and 2002 because there is very little written about non financial corporate governance principles in South Africa. Specifically, the study looks at safety, health, ethics and issues related to human resources management. Information on financial corporate governance principles is readily available and hence subject to easier monitoring and analysis than that on non-financial corporate governance principles. In this study a questionnaire was used to solicit for information from employees about the extent to which non-financial corporate governance principles are implemented within the municipality. The thrust of the study was to get an in-depth understanding of the issues and their application to the daily functioning of the municipality. Out of the one hundred questionnaires that were distributed 64 were completed and returned. The key findings of the study suggest that municipal workers are neutral towards non financial matters of corporate governance at the municipality (in terms of mean scores are relative to the mid-point score of three (3) on the five (5) point scale utilized in the study). However, two principal areas emerge from the analysis. One is a negative point of view, the effectiveness of the HIV/AIDS plan is regarded with disfavor by the municipal workers and second point of view which is positive, where the municipal effort to address environmental issues is regarded in a favorable light by municipal workers in the study. In sum, one can conclude that the municipality has not been able to effectively implement non-finance corporate governance principles with particular reference to safety and health issues. The perceptions of employees on ethics at the workplace, just like those for safety and health are neutral. Though an above neutral point is recorded for transparency by management the common belief is that information on organizational performance is not readily available. Added to this is the lack of an effective system for reporting unethical behaviour. Though less than ten percent responses were recorded for these aspects, poor discipline and lack of role clarity were identified as the major obstacles to ethical behaviour in the organization. The key issues for human resource development relate to performance management and training. The responses suggest that if employees are to be effective, more training needs to be conducted. Though respective Sectors of Education and Training Authority (SETAs') offer an opportunity for further staff development, the benefits of such initiatives have not been felt by the employees. Furthermore, the association between performance appraisals and training is yet to be seen. Overall, this study confirms that there is neither a complete lack of non-financial corporate governance principles nor is the implementation of the same clear and beneficial to all employees. Seemingly, employees across the board do have a hazy picture about the application of these principles in the municipality but apparently do not have adequate information to take a definite stance and hence the majority gave neutral responses. In conclusion the study recommends that with regard to the health and safety working environment the employer needs to intensify its HN/AIDS programmes which are contained in the HIV/AIDS policy of the Municipality. In this effort it should conduct more workshops that encourage voluntary testing which will assist the organization to plan ahead with regard to future human capital needs resulting from HIV/AIDS pandemic. There was recognition of a certain concern for the safety of its employees,however, not as fully recommended by Occupational Health and Safety Act, No. 181 of 1993. It is therefore recommended that the municipality applies the requirements of this Act to ensure the safety of its employees. It was further recommended that a hot-line facility to report any unethical behavior be implemented and that the employer take what has been reported seriously so that employees and the community could have confidence in the system. The employer was also encourage to improve consultation with the stakeholders so that its policies and strategies are not considered to have been taken unilaterally, in other words, the employer should promote democracy in the workplace. The employer was further adviced to implement a performance management system that would link with training and development of human resource capital. In fact chapter 6 of the Municipal System Act, No. 32 of 2000 suggests that municipalities should have organizational and individual performance management systems so that they can measure their performance at organizational as well as individual level to enhance service delivery.
Description
Thesis (MBA)-University of KwaZulu Natal, 2005.
Keywords
Theses--Business administration., Corporate governance.