Impact of Corporate Governance in the Performance of Parastatal Organizations in Zambia

: This study was set up try to address some of the problems which the Parastatal organizations have been facing in their operations. Corporate governance is seen as being critical in the leadership of Parastatal organizations. One of the motivating reasons for establishing Parastatal organizations in Zambia is to facilitate social and economic development in sectors that are not considered expedient for private sector investment by foreign and local investors. However, the Parastatal organizations established by the government to fill this vacuum have been faced with challenges that constrain their ability to perform optimally. The Board of Directors are key in the success of the Parastatal organizations. Primary methodology used in this study is Qualitative field research. Sampling was based on non-probability which is purposive sampling. After initial participants were selected using purposive sampling, Snowball sampling was used to select subsequent participants. In this study, opinions, perceptions, feelings, attitudes, and beliefs were sought through face-to-face informant interviews supplemented by the desk research. The study population were former Government leaders, Board of Directors, and senior management members who had been involved in Parastatal organizations. In-depth interview methodology was used where each person interviewed shared with the interviewer’s understanding on the subject of the role of leadership in Parastatal organizations in Zambia. Government Leaders, Board of Directors and Senior management leaders who were appointed to run these organizations were the main target groups for this study. A total of 40 respondents (comprising of 30 males and 10 females) belonging to the existing and past Parastatal organizations were systemically interviewed within their setting. Leadership in these organizations is led by the Board of directors were appointed by the minister. The board then have a responsibility of appointing and overseeing the senior management to hold them responsible for the success of the organization. Most of the participants were quick to point out that the leadership in parastatal organizations are mostly constrained by political interests whereby what is actualized within organizations is not the vision of Parastatal leaders but the interests of the politicians running the country. Parastatal organizations are supposed to be contributing to domestic revenue, employment creation and economic growth. Unfortunately, Parastatal organizations in Zambia had in the past been marred with inefficiencies, high liabilities and poor financial management. This has been mainly attributed to the interferences of Government in the Board of Directors.