The South African economic landscape changed for ever after the first democraticelection of 1994. The change heralded an era of inclusion, the economic landscapebecame open to people from all races, whereas before economic power wascentralised in the hands of a minority group due to Apartheid legislation.Exploring the relationship of diversity of board members on the corporategovernance of small, micro and medium enterprises (SMME’s) in South Africa hasbecome imperative. Understanding the relationship, if any, which exists can aidSMME’s in board selection and corporate governance alike.Data for the study was collected through a self-enumerated questionnaire completedelectronically and followed-up by interviews with heads of boards surveyed. Both thequestionnaire and the interviews focussed on corporate governance, which includeddifferent components of governance such as the general principles of governancefollowed in the enterprise, the stakeholder focus exerted by the board of directorsand the functioning of the board of directors. This resulted in a score for theenterprise which can be expressed as a percentage. This governance indicator wasrelated to questions on the diversity of board members.The findings were in many cases contradictive when a single variable was observedagainst the score an enterprise achieved for governance. When taking a moreholistic approach and evaluating multiple variables, it became evident that it is rathera combination of variables which displays some relationship with corporategovernance.This study found that board diversity does have a relationship with corporategovernance. The magnitude of this relationship could not be ascertained andwarrants further research in a wider spectrum of the South African economy and alsowith a larger group of subjects.
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