Corporate Governance Compliance by State-Owned Utility Companies in Sierra Leone

This paper investigates the extent of compliance by two State-Owned Utility Companies (SOUCs) in Sierra Leone with international best-practice corporate governance principles as prescribed by the Commonwealth Association of Corporate Governance (CACG) Code. The CACG Code (1998) is generally considered a benchmark for best-practice corporate governance in commonwealth and some non-Commonwealth countries worldwide. The study used a descriptive cross-sectional case study survey design with a quantitative approach, in which two purposively selected SOUCs, Electricity Distribution and Supply Authority (EDSA) and Guma Valley Water Supply Company (GVWC) were considered. Primary data were collected through a questionnaire survey of the selected SOUCs supplemented with secondary data from document sources. Quantitative survey data analysis was conducted using SPSS and Excel programs. It used simple descriptive statistics to describe corporate governance compliance of SOUCs. Using a compliance checklist of 39 provisions from the CACG Code, the study found that majority (62%) of the responses recorded a negative opinion about standard corporate governance compliance in the SOUCs, and that both SOUCs have an overall weak (47%) corporate governance compliance, with weak compliance at 48% and 46% in EDSA and GVWC respectively. The results indicate that SOUCs did not adhere to international best practice corporate governance, which could signal a lack of investor appeal. It could also be a signal to stakeholders that necessary steps must be taken to address poor corporate governance mechanisms in the SOUCs.