Managerial and legal accountability in state-owned enterprises: exploring financial sustainability through accounting for and reporting public service obligations

Adeyemi Adebayo

Accounting Research Journal, 2025, vol. 39, issue 2, 197-219

Abstract: PurposeThis study aims to assess the publicly available disclosures of South African state-owned enterprises (SOEs) with reference to the extent to which their annual/integrated reports contain pertinent information on their public service obligations (PSOs). Reporting PSOs is one of the methods that SOEs use to demonstrate accountability to their stakeholders. Hence, public accountability and transparency are strengthened when SOEs disclose their PSOs.Design/methodology/approachData for this study were drawn from a content analysis and disclosure scoring of the latest five-year annual/integrated reports of the 21 Schedule 2 and 21 Schedule 3B SOEs for the period 2018–2022, as well as semi-structured interviews with relevant SOE stakeholders.FindingsFindings from the content analysis indicate that few of the 21 Schedule 2 and the 21 Schedule 3B SOEs disclosed their PSOs. In this regard, follow-up interviews reveal that despite provisions for SOEs to report on their PSOs, institutional stakeholders charged with oversight duties do not encourage such disclosures.Originality/valueThe results have implications for the financial sustainability of SOEs, especially SOEs that frequently require bailouts and hide behind PSOs to justify their fruitless and wasteful expenditures. Thus, the observations in this paper have implications for research, policy, practice and society, as well as for wider accountability and reporting practices in SOEs. To the best of the author’s knowledge, this study represents one of the only studies on this topic in Africa, a continent with developed SOE sectors and in which SOEs are important public goods and services delivery mechanisms.

Keywords: Accountability; Disclosure; Legal accountability; Managerial accountability; Public service obligations; Social service obligations; State-owned enterprises (SOEs) (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arjpps:arj-02-2025-0068

DOI: 10.1108/ARJ-02-2025-0068

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