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1. An investigation into the relationship between good corporate governance and corporate sustainability: the case of public further education and training colleges in Gauteng province of South Africa Presented by Manager. M. Muswaba (FCIS) D. Tech. Student Tshwane University of Technology: Business School 12 November 2011 Business School

2. Outline of the oral presentation • Introduction and background of study • Research problem • Research objectives • Methods and materials • Results of study • Recommendations • Limitations of study Business School

3. Introduction and background of study Introduction • Turbulent environment within the Public Further Education and Training College (FET) sector which dated back to the nineteenth century (Behr (1988) , Malherbe (1977), governance structures, processes and systems • Public FET Colleges criticised for failure to increase output and their failure to provide stakeholder needs, despite having been receiving huge funding support from the government in recent years. • Research seeks to establish whether FET College council boards with their increased level of responsibility and accountability has had an impact in fostering good corporate governance in their colleges in the recent years. • The thesis provides a practical approach in identifying the availability or failure of key good corporate governance principles for corporate sustainability in the FET Colleges. • Contribution of the study • Explore factors of good corporate governance and corporate sustainability within the public FET colleges and suggest the integration of these factors. Business School

4. confirmed empirically the existence of numerous factors that moderate the link between improvements in corporate governance and corporate sustainability of public colleges. • Recommended governance strategies, models and frameworks for FET institutions to realise their optimal potential performance. Study specific objectives • To identify key factors that affects best practices and enforces effective sustainable and good corporate governance in the public FET Colleges in Gauteng Province of South Africa. • To identify suitable models for ensuring sustainable development as well as good corporate governance in the FET colleges in South Africa. • To assess the impact of corporate governance and corporate sustainability • in the public FET institutions of Gauteng Province of South Africa. Business School

5. Research problem • Public FET Colleges have been receiving criticism for failure to increase output and their failure to provide stakeholder needs, despite having been receiving huge funding support from the government in recent years. (HRSC, 2009) • The research seeks to establish whether FET College governing boards with their increased level of responsibility and accountability has had an impact in fostering good corporate governance in their colleges in the recent years. • The thesis provided a practical approach in identifying the availability or failure of key good corporate governance principles for corporate sustainability in the FET Colleges. Business School

6. Literature Review Defining good corporate governance • Davies, (1999) Greek word kubernaein meaning steering • Cadbury (2002) Latin word gubernare meaning to steer • Pierre & Peters (2000)French word referred to royal officer • Soanes, (2002) the action or manner of governing. • Soanes, (2002) to govern means conduct the policy and affairs of a state, organisation, people or either to control or influence. • Hirst (2000) governance alternative to government, to control by the state • Peters P(2000) old governance and new governance Defining corporate sustainability • Elkington (2001) triple-bottom line, as a focus towards economic prosperity, environmental quality, and social justice. • Welford and Jones (1998) translate conceptual theories of sustainable • development by looking at their own ethics, their objectives and their own • forms of organisation, corporate culture and communication in practical way. Business School

7. Theoretical Frameworks • Theories of corporate governance • Agency theory • Stakeholder • Contingency approach • Managerial Hegemony • Evolution of FET governance in South Africa • FET colleges until 1955 • H.E.A 30 of 1923 • Colleges juristic persons • Gvt Union of representatives worked with • Provinces • 1924 Colleges transferred to CG • 1954 colleges became state owned • FET Colleges 1955-1982 • V. E A. 70 of 1955 (problems of control and mgt • Act no. 104 of 1981 brought in State Aided • Colleges and State colleges • FET Colleges 1982-1994 • Williamson (1992) 1982 two governance systems • formed SAC & SC • FET college 1998- 2011 • FET Act 98 of 1998 • FETC Act 26 of 2006 • Corporate governance frameworks • King I, II, III • Cardbury • Green Bury • Hambury • Turnbull • Combined • Stakeholder involvement • Corporate citizenship • Board structure and board composition • Review of board performance • company secretary • principles of good governance • principles of corporate sustainability Business School

8. Methods and materials Study design • The design of the study was descriptive and cross-sectional Sample size of study and sampling techniques • Population of 128 College Council members of public FET colleges in Gauteng province. • The entire population of 128 council members constituted the sample Data collection instruments • A structured, self-completion questionnaire [Quantitative research design: Best and Kahn (1993), Zikmund (2003)] • Face to face in-depth interviews [Qualitative (Garbers (1963), Gudmunsdottir (1996)] Statistical methods of data analysis (Qualitative + Qualitative) • Frequency tables and cross-tabs were used for summarising data • Binary logistic regression analysis was performed between good corporate governance and various factors that affected good governance (Hosmer and Lemeshow, 2002) • The reliability of the fitted logistic regression model was assessed based on standard classification tables, and the Hosmer-Lemeshow goodness-of-fit test • Adjusted odds ratios were used as a measure of effect • Odds ratios were adjusted for potential confounding variables (gender, age category, race, place of residence and level of education) • In-depth interviews were analyzed based on tallying, coding and text analysis • (Qualitative research) . Triangulation with subject matter specialists was used for verification. Business School

9. Results of study Figure 2: Good governance factors • Frequency tables for categorical variables of study • Y: Good corporate governance (Yes, No) is the dependent or outcome variable of study. Y1: Corporate sustainability (Yes, No) is the dependent or outcome variable of study • The dependent variable of study (Y) is dichotomous because its 2 possible values are 1 and 0 • Y=1 if factors needed for the efficient and effective corporate governance and sustainability are not available. Y=0 if factors needed for the efficient and effective corporate governance and corporate sustainability are available . Figure 3: Sustainability Factors Business School

10. Table 3: Results obtained from the Pearson chi-square test of associations (1) Table 4: Results obtained from the Pearson chi-square of associations (2) • Results obtained from binary logistic regression analysis • Adjustment was done for five well known potential confounding variables in the FET college • sector of Gauteng Province. These confounding variables were, level of education, age category, • race, gender and the status of council membership (internal or external). • Adjusted and unadjusted odds ratios were similar in magnitude and significance. • This shows that none of the five potential confounding variables was a confounding • variable. Thus, the estimated results were not affected by confounding variables. Business School

11. Recommendations • College council boards to act as the focal point for corporate governance and sustainability by • identifying and taking account of the legitimate expectations of stakeholders. • The board should take account of the legitimate interests of stakeholders in its decisions. • college boards should have qualified company secretary • A new framework and governance model for FET colleges should be developed. • College council boards should ensure that the colleges act as responsible corporate citizens. • Board to ensure that the college develops and implements an effective compliance framework • and process. • Training and development of directors should be conducted through formal processes • The performance of the Board, its Committees and individual directors should be evaluated annually • The council boards should establish and delegate certain functions to well structured committees without • abdicating its own responsibility • FET council boards should develop strategies and policies to guide its activities, to fall in line with • the actions of good corporate citizenship and good governance. • The council boards should establish systems to cultivate and promote ethical corporate culture • The colleges should have an effective Audit Committee. Audit Committee members should be suitably • skilled and experienced independent non-executive council members. • Sustainable reporting and disclosure should be formalised as part of the college’s reporting • processes • To uphold integrity and honest council members must disclose any conflict or potential • conflict of interest. Business School

12. Limitations of study • Study conducted in Gauteng Province only; Should be extended to other provinces . • Limitations of time, budget and capacity. • Sensitivity attached to corporate governance and performance affected conduct of interviews with council board level personnel in the colleges. • A number of future studies are needed to promote more frequent and meaningful sustainability systems and structures. • Comparative analysis among different geographical, economic, and political contexts may also uncover some of the drivers of good governance and sustainability in the FET sector. • Future studies should continue to investigate the indicators and data-generating methodologies used in developing college governance guidelines and frameworks. • Attempts by the researcher to integrate the different stakeholder responsibilities for sustainability was limited to colleges, college councils as policy makers, students as consumers • and the government as the major shareholder. Business School

13. Thank You Manager. M. Muswaba (FCIS) Business School