Assessing corporate governance disclosures in South Africa's national government departments: The state and corporate governance

The main objective of this study is to assess corporate governance disclosures in the annual reports of South Africa's national government departments. The main finding is that national government departments do not widely adhere to sound corporate governance practices, as recommended by the King III Report on Corporate Governance, and are required by the Public Finance Management Act, and the South African Treasury Regulations. The critical areas that were poorly disclosed by national government departments include the information which indicates whether the strategic internal audit plan was based on the key areas of risk facing the department, and whether this plan had taken into account the department's risk management strategy. Further, it was not clear whether departments had Chief Risk Officers, or a directorate for risk management, to drive the risk management programme. The study does note, however, that there are some national government departments that have demonstrated compliance with the spirit of good corporate governance by disclosing the required information in their annual reports. Stemming from this, the study recommends that those government departments which are compliant with the required corporate governance disclosures share their corporate governance disclosure practices with their counterparts in interdepartmental meetings. A further recommendation stemming from the findings is that those employees who are responsible for preparing the annual reports in each national government department should conduct a benchmarking exercise against other departments' annual reports, to assist them to identify and understand any shortcomings in their annual reports.