The quality of corporate governance in South Africa: Comparing the parastatal and listed industrial sectors

Van Wyk, Mike F. A icle The quali y o co po a e go e nance in Sou h A ica: Compa ing he pa as a al and lis ed indus ial sec o s Sou h A ican Jou nal o Business Managemen P o ided in Coope a ion wi h: Uni e si y o S ellenbosch Business School (USB), Bell ille, Sou h A ica Sugges ed Ci a ion: Van Wyk, Mike F. (1999) : The quali y o co po a e go e nance in Sou h A ica: Compa ing he pa as a al and lis ed indus ial sec o s, Sou h A ican Jou nal o Business Managemen , ISSN 2078-5976, A ican Online Scien i ic In o ma ion Sys ems (AOSIS), Cape Town, Vol. 30, Iss. 2, pp. 48-64, h ps://doi.o g/10.4102/sajbm. 30i2.755 This Ve sion is a ailable a : h ps://hdl.handle.ne /10419/218207 S anda d-Nu zungsbedingungen: Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen Zwecken und zum P i a geb auch gespeiche und kopie we den. Sie dü en die Dokumen e nich ü ö en liche ode komme zielle Zwecke e iel äl igen, ö en lich auss ellen, ö en lich zugänglich machen, e eiben ode ande wei ig nu zen. So e n die Ve asse die Dokumen e un e Open-Con en -Lizenzen (insbesonde e CC-Lizenzen) zu Ve ügung ges ell haben soll en, gel en abweichend on diesen Nu zungsbedingungen die in de do genann en Lizenz gewäh en Nu zungs ech e. Te ms o use: Documen s in EconS o may be sa ed and copied o you pe sonal and schola ly pu poses. You a e no o copy documen s o public o comme cial pu poses, o exhibi he documen s publicly, o make hem publicly a ailable on he in e ne , o o dis ibu e o o he wise use he documen s in public. I he documen s ha e been made a ailable unde an Open Con en Licence (especially C ea i e Commons Licences), you may exe cise u he usage igh s as speci ied in he indica ed licence. h ps://c ea i ecommons.o g/licenses/by/4.0/ 48 S M JBus Manage.1999.30(21 The quali y o co po a e go e nance in Sou h A ica: compa ing he pa as a al and lis ed indus ial sec o s Mike F. an Wyk Box 86, Fon ainebleau 2032, Sou h A ica Recei ed May I 999 The quali y o co po a e go e nance se ice in he pa as a al (also called public en i y) and lis ed indus ial nmpany sec- o s o he Sou h A ican economy was assessed. The assessmen was done using newly de eloped se ice quali y assess- men ins umen s. The eliabili y o he indings on he quali y o co po a e go e nance se ice implied a 99.5% p obabili y ha he sample mean did no di e om he popula ion mean by mo e han 0.2 on a se en-poin scale. In bo h sec o s he ac ual co po a e go e nance se ice was assessed agains wo le els o expec a ion, namely he desi ed se ice le el and he lowes accep able se ice le el. The ins umen s we e he same excep o a ew adap a ions o ca e o he less s in- gen ly legisla ed lis ed company sec o and o p o ide o insigh s gained om he i s assessmen . Bo h assessmen s e- sul ed in he same ou dimensions, namely 'di ec ing and moni o ing', 'boa d capaci y·. ·assu ance· and · esponsi eness and eliabili y'. One undamen al di e ence was epo ed, namely ha he lis ed company di ec o s' co po a e go e nance was in o al, in all ou dimensions and on all c i e ia assessed as be ween he lowes accep able and he desi ed se ice le - els. The public en i y di ec o s' co po a e go e nance se ice was in o al, in all ou dimensions and on all c i e ia assessed as below he desi ed as well as he lowes accep able se ice le els. The s anda d de ia ions as epo ed we e such ha i has o be concluded ha accep able and unaccep able co po a e go e nance se ice le els a e ound in public en i ies as well as in lis ed companies. The assessmen esul s a e epo ed below g aphically. Th ee c i e ia appea ed on bo h assess- men s' lis s o en wo s -assessed c i e ia. They we e di ec o s 'being always p ope ly p epa ed o mee ings·. "doing hei homewo k ho oughly' and 'displaying impeccable in eg i y and hones y, o example wi h hei own claims·. In oduc ion Du ing he pas decade o so he ole o co po a e go e nance in he success o ailu e o en i ies has become inc easingly p ominen . Resea che s, mainly a e scandals, consis en ly epo (Bu le , 1991: 24; Daily & Dal on, 1994: 647; Finkel- s ein & Boyd, 1998: 179; Mel ille-Ross, 1996: 54; Pea ce, 1991: 157) co ela ions be ween success and 'good go e n- ance p ac ices' and be ween ailu e and 'bad go e nance p ac ices·. Some imes ecommenda ions (Co in, 1993: 81) a e no based on inding o co ela ions bu on logic o pe sonal opinion. Pleas (Mills ein, 1997: 10, Sande s & Ca pen e , 1998: 164; and Single on-G een, 1993: 45) be o e, du ing and a e in e en ions o ad ance good go e nance p ac ices, con inue. Examples o he nume ous commissions and commi ees used o in es iga e co po a e go e nance a e he T eadway Commission (1987) in he Uni ed S a es, he Cadbu y Commission (1992) in he Uni ed Kingdom and he King Commi ee (1994) in Sou h A ica. O e ime good go e nance commissions ha e esul ed in olun a y and some imes no so olun a y compliance wi h good go e n- ance p ac ices. Al hough he wisdom o na ional and uni e sal s anda diza ion o good go e nance p ac ices is s ill ho ly deba ed, esea ch (De Cas o, 1998: 23; Conne , 1995: 19; B yne, 1996: 64) indica es inc eased compliance wi h such p ac ices. Scien i ic assessmen o he quali y o co po a e go e n- ance as opposed o he le el o compliance wi h good go e n- ance s anda ds, emains la gely un epo ed. Two esea ch p ojec s in Sou h A ica may shed some ligh on he quali y o co po a e go e nance in Sou h A ica. In he i s s udy (Yan Wyk, 1998) he au ho assesses he quali y o co po a e go - e nance in Sou h A ican s a e- unded en i ies, called public en i ies, as p ac iced by hese en i ies' di ec o s. Public en i y di ec o s a e, almos wi hou excep ion, non-execu i e. In his second s udy he au ho assesses he quali y o co po a e go · e nance in he indus ial sec o o companies lis ed on he Johannesbu g S ock Exchange. Lis ed company di ec o s comp is'! a mix o execu i e and non-execu i e people. An ins umen o assess he quali y o he co po a e I go e nance se ice A undamen al p emise in he assessmen o he quali y o I co po a e go e nance is ha co po a e go e nance en ails he ende ing o a se ice. In he case o companies he di ec o s ende he co po a e go e nance se ice o sha eholde s as he main clien s. In he case o public en i ies he axpaye is he main clien . The se ice in ol ed in go e ning co po a· ions mee s he c i e ia o Pa asu aman e al. (I 988: 13) o quali ying as a se ice, namely in angibili y. he e ogenei y. , and he insepa abili y o p oduc ion and consump ion. A ecen li e a u e e iew o se ice measu emen ins u· men s e ealed ha he e was no ins umen speci icall) designed and used o e alua e he quali y o co po a e go e nance se ice, whe he in comme cial companies o m public en i ies. Ex ensi e use o a se ice quali y assessmen ins umen called SERVQUAL was howe e epo ed (Babakus & Bolle , 1992: 253-268; Ca man, 1990: 33-~i: Chas on, 1995: 332-349; C onin & Taylo , 1994: 125-IJ · He be , 1994: 3-21; Ke inge & Lee, 1994: 737-767; ~: asu aman e al., 1988: 12-40; Pa asu aman e al., 1991: 4~ 1 450; P 1 asu aman e al., 1993: 140-147; Pa asu aman e a·· 1994: 111-124; Pa asu aman e al., I 994: 201-230; Pi e 01 :· 1995: 173-187; Teas. 1994: 132-139; Whi e & Abels. 1 99 ) 36-45). In all a eas o SERVQUAL's applica ion he assess~ men s we e done by people (some in e nal) wi h i s -hand expe ience o he quali y o he se ice e,ide e s.A .J.Bus.Managc. 1999.30(2) Sha eholde s and axpaye s do no a end boa d mee ings and a e he e o e ill equipped o assess he quali y o co po a e go e nance se ice. I was concluded ha he me hodology used in he de elopmen o SERVQUAL (Pa asu aman e al J 988: 12--40), namely Chu chill's pa adigm o de elopin~ be e measu es, esul ed in a eliable ins umen ha could be used o de elop an ins umen o assessing co po a e go e n- ance se ice. Chu chill ( 1979: 67) s esses he impo ance o speci ying he domain o esea ch. Fo he pu poses o he de elopmen o his assessmen ins umen , he domain was speci ied as sa is ac ion wi h co po a e go e nance se ice. Sa is ac ion was de ined as inco po a ing he h ee le els discussed by Pa asu aman e al. ( 1994: 209-228). These a e he expec ed se ice le el, he lowes accep able se ice le el and he ac u- ally expe ienced se ice le el. In gene a ing c i e ia i ems o cap u e he speci ied domain (Pa asu aman e al., 1988: 38), SERVQUAL's i ems o assessing se ice in gene al we e supplemen ed wi h i ems iden i ied h ough a li e a u e e- iew o co po a e go e nance. In addi ion o hese i ems and he 22 SERVQUAL i ems, i ems submi ed by expe s in The Ins i u e o Di ec o s' aining ideos we e used o de elop an i em bank o conside a ion by a panel o esea che s om he Human Sciences Resea ch Council (HSRC). This HSRC panel's inpu esul ed in he elimina ion o some SERVQUAL i ems, and an ini ial ins umen wi h 55 i ems was subse- quen ly used o scale pu i ica ion wi h he public en i ies. A ma ginally e ised ins umen wi h 54 i ems was la e used wi h he lis ed companies. This e ision was unde aken o accommoda e he di e en na u e o he lis ed companies. Public en i y su ey Some wo yea s p io o he su ey he Minis e o Finance ins uc ed a o al o wen y en i ies (SAICA, 1995) o comply wi h p esc ibed good go e nance p ac ices. In he yea p e- ceding he su ey hese public en i ies had a combined u n- o e o R55 billion and hey we e used as he popula ion o he pu poses o he su ey. App oxima ely 140 execu i es in hese public en i ies egula ly a ended boa d mee ings bu we e no di ec o s hemsel es. Nine y-se en o hese exe- cu i es we e eques ed o assess he quali y o he co po a e go e nance~ se ice ende ed by hei boa ds and 49 e en ually esponded. The 49 esponses we e p ocessed and he scale was pu i ied in acco dance wi h Chu chill's (I 979: 69) ecommenda ions. Se e al ounds o compu ing coe icien alphas (on he ex- pec ed minus expe ienced se ice le el sco es), elimina ing i ems wi h low co ec ed i em- o- o al co ela ions and ob- lique ac o analysis in e ms o he OBLIMIN p ocedu e in SPSS we e done. In acco dance wi h Pa asu aman e al. (I 988: 20) some i ems we e eassigned o o he dimensions, and by epea ing he i em-dele ion and eassigning p ocess se e al imes he numbe o i ems was educed o 31, ep e- sen ing ou dis inc dimensions. A e execu ing he abo e p ocedu e he alpha alues anged be ween 0.84 and 0.95 in he ou dimensions, wi h ac o loadings anging be ween 0.42 and 0.93. The a e age pai wise co ela ion be ween he ou ac o s ollowing ob- lique o a ion was 0.29, and in all h ee o he abo e a eas (al- pha alues, ac o loadings and pai wise co ela ion) he 49 esul s we e simila o o be e han hose achie ed b Pa - asu aman e al. ( 1988: 24 ). Chu chill ( 1979: 68) epo~s ha Nunally p oposed alphas be ween 0.50 and 0.60 o simila ea ly-s age basic esea ch and s a es ha inc easing alphas beyond 0.80 is ega ded as was e ul. The inal ou dimensions wi h hei concise de ini ions we e as ollows: -Di ec ing and moni o ing: gi ing di ec ion o and moni- o ing he en i y; -Boa d capaci y: ha ing he capaci y o execu e he co po- a e go e nance; -Responsi eness and eliabili y: ha ing he willingness and dependabili y o ac ; -Assu ance: ca ing o he s akeholde s. The eliabili y o linea combina ion ( o al scale eliabili y) was 0.96. This alpha again subs an ially exceeds he 0.90 e- qui ed by Chu chill ( 1979: 68) o applied esea ch as well as his 0.95 equi emen o eliabili y o basing impo an deci- sions on. The pe cen age a iance ex ac ed by he ou ac- o s was 70.3. Lis ed indus ial companies su ey Fo he pu poses o his assessmen he Financial Mail's 1997 (363-366) Top Companies Su ey was used. The company sec e a ies o he 200 la ges ( anked by u no e and wi h a o al annual u no e o o e R500 billion) lis ed indus ial companies we e eques ed o assess he quali y o hei boa d's co po a e go e nance se ice. Six y sec e a ies e en ually esponded. The assessmen was done wi h a minimally e ised ins umen ( o accommoda e he di e en na u P. o he lis ed companies) consis ing o 54 i ems. A e execu ing he p ocedu es desc ibed abo e as o he public en i ies, he alpha alues anged be ween 0.86 and 0.95 in he ou dimensions, wi h ac o loadings anging be ween 0.31 and 0.83. The a e age pai wise co ela ion be ween he ou ac o s ollowing oblique o a ion was 0.39 and in all h ee o he abo e a eas (alpha alues, ac o loadings and pai wise co ela ion) he esul s we e again simila o o be - e han hose achie ed by Pa asu aman e al. ( 1988: 24). Thi y-six i ems emained in he ins umen and he inal ou dimensions wi h hei concise de ini ions we e he same as o he public en i ies. The eliabili y o linea combina ion ( o al scale eliabili y) was 0.965. This alpha again subs an ially exceeds he 0.90 e- qui ed by Chu chill ( 1979: 68) o applied esea ch as well as his 0.95 equi emen o eliabili y o basing impo an deci- sions on. The pe cen age a iance ex ac ed by he ou ac- o s was 65.7. Validi y The inal assessmen ins umen s used o assessing he public en i ies and he lis ed companies a e a ached as Annexu es I and 2. A e inalizing he wo ins umen s and e i ying hei con en alidi y, a e iew o bo h ins umen s was done o ensu e ha hey measu ed wha hey we e supposed o measu e and ha hey measu ed all he impo an ace s o he domain. The i ems ha had been d opped om he ins umen s o inc ease eliabili y we e checked agains hose emaining in he ins umen s and agains he expe opinions o ensu e ha he le el o con en alidi y equi ed 50 by Pa asu aman e al. ( 1988: 28) was me . In addi ion and o he same pu pose, he i ems emaining in he ins umen we e checked o comple eness agains he li e a y e iew. Twen y- nine o he 31 i ems in he inal public en i y ins umen again ea u ed among he 36 i ems ha su i ed he eliabili y pu i ica ion o he lis ed company ins umen . In assessing SERYQUAL's con e gence alidi y, Pa asu a- man e al. ( 1988:28) measu ed he co ela ion be ween he e- sponses o he SERYQUAL sco es and o a ques ion ha p o ided an o e all a ing o he se ice unde e alua ion. This was also done o bo h new ins umen s. Rega ding co - ela ion wi h measu es o o he ela ed a iables, he espond- en s o he public en i y ins umen we e asked o a e he co po a e go e nance se ice's o e all quali y by ma king one o he ou wo ds 'poo ', ' ai ', 'good' and ' op'. The co ela ion be ween his a ing o o e all quali y and he sco es was examined using a one-way analysis o a iance wi h he ca ego ies 'poo ' and ' ai ' combined. Sepa a e anal- yses o a iance we e conduc ed o he o al scale and o each dimension, wi h he di e ences be ween desi ed and ac- ual and be ween lowes accep able and ac ual sco es ac ing as dependen a iables du ing sepa a e uns. Duncan's (Pa - asu aman e al., 1988: 29) mul iple- ange es was hen ap- plied o u he in es iga e he analysis o a iance esul s. S a is ically signi ican di e en a e ages we e ound be- ween he op/good and he ai /poo ca ego ies bu no be- ween he op and good o ai and poo ca ego ies. The ull indings a e epo ed in Annexu e 3. In bo h inal ins umen s alidi y was assessed ( ollowing Chu chill, 1979: 70 and Pa asu aman e al., 1988: 30) by de- e mining whe he he cons uc being e alua ed was empi i- cally associa ed wi h he measu es o o he concep ually ela ed a iables. The esponden s we e asked wo gene al ques ions (ma ked 'Recommend' and 'P oblem' in Annexu e 4 o he public en i ies and 'Recommend' and 'Que ied' in Annexu e 4 o he lis ed companies) ha we e expec ed o co ela e concep ually wi h pe cei ed quali y. I he espond- en s answe ed 'yes' o he ques ion 'would you ecommend he boa d o appoin men a ano he company' and 'no' o he ques ion 'ha e you e e se iously ques ioned he boa d's go e nance', such a boa d was hypo hesized o ende be e se ice quali y han o he s. Wi h he public en i ies i was ound ha in all ou dimen- sions and on he combined scale he mean esponses o he esponden s willing o ecommend hei boa ds we e signi i- can ly di e en om he mean esponses o he esponden s no willing o ecommend hei boa ds. This was he case on bo h le els o sa is ac ion, namely expec ed minus ac ual and lowes accep able minus ac ual se ice 'le els. The mean e- sponses o he esponden s who had se iously ques ioned hei boa ds we e o he combined scales a bo h le els o sa is ac ion, namely expec ed minus ac ual and lowes accep - able minus ac ual se ice le els, signi ican ly di e en om he esponses o he esponden s who had no se iously ques- ioned hei boa ds. A bo h se ice le els his signi ican di - e ence was obse ed o i e o he eigh dimensions. These indings a e simila o hose o Pa asu aman e al. ( 1988: 30) and mee Chu chill's (I 979: 70) equi emen o esponses co ela ing wi h o he measu es o he same a iable. I was he e o e concluded ha he s eng h and pe sis ence o he S.A J Bus Manage.1999,30(2) linkages be ween o e all quali y and his ins umen 's clea ly indica ed ha he ins umen 's con e gence ~°: was equal o ha o SER VQUAL. y Wi h he lis ed companies i was also ound ha in all dimensions and o~ ~e combined scale he moon esponse~~ he esponden s w11lmg o ecommend hei boa ds we e · s1g. ni ican ly ~i'. e en om he mean esponses o he espond- en s no w1llmg o ecommend hei boa ds. This was he case on bo h le els o sa is ac ion, namely expec ed minus ac ual and lowes accep able minus ac ual se ice le els. The mean esponses o he esponden s who had se iously ques ioned hei boa ds we e o he combined scales a he lowes ac- cep able minus ac ual le el o sa is ac ion signi ican ly di e . en om he esponses o he esponden s who had no se iously ques ioned hei boa ds bu no a he expec ed mi- nus ac ual le el. A he lowes minus ac ual se ice le el his signi ican di e ence was obse ed o all ou dimensions bu a he expec ed minus ac ual se ice le el o only one o he ou dimensions. These indings a e simila o hose o Pa asu aman e al. ( 1988: 30) and mee Chu chill's (1979: 70) equi emen o esponses co ela ing wi h o he measu es o he same a iable. I was he e o e concluded ha he s eng h and pe sis ence o he linkages be ween o e all quali y and his ins umen 's sco es clea ly indica ed ha he ins umen 's con e gence alidi y was equal o ha o SERVQUAL. Resul s: he quali y o co po a e go e nance in pub- lic en i ies The indings o he assessmen o he quali y o co po a e go e nance in public en i ies a e ully se ou in Annexu e 5 .. The esponden s indica ed, on a se en-poin scale o he o e all ins umen , a mean desi ed se ice le el o 6.3 (s and· a d de ia ion 0.4). The i em wi h he highes desi ed se ice le el was 'displaying impeccable in eg i y and hones y', wi h a mean sco e o 6.9 and a s anda d de ia ion o 0.3. The i em wi h he lowes desi ed se ice le el was 'deli e ing angible bene i s by knowing impo an people', wi h a mean sco e o 5.6 and a s anda d de ia ion o 1.4. The dimension 'boa d ca- paci y' eco ded he highes desi ed mean sco e o 6.5 (s and- a d de ia ion 0.5), wi h he emaining h ee dimensions all eco ding desi ed mean sco es o 6.3. The esponden s indica ed, on a se en-poin scale o he o e all ins umen , a mean lowes accep able se ice le el o 5.3 (s anda d de ia ion 0.8). The i em wi h he highes mean sco e on his lowes accep able se ice le el was 'displaying impeccable in eg i y and hones y', wi h a mean sco e o 6.4 and a s anda d de ia ion o 0.8. The i em ha sco ed he low- es in his ca ego y was 'deli e ing angible bene i s by knowing impo an people', wi h a mean sco e o 4.5 and a s anda d de ia ion o 1.5. The dimension 'boa d capaci y' e- co ded he highes lowes accep able mean sco e o s. 7 (s anda d de ia ion 0.7) wi h 'di ec ing and moni o ing' sec: ond (mean sco e 5.3 and s anda d de ia ion 0.8), 'assu ance hi d (mean sco e 5.2 and s anda d de ia ion 0.8) and ' e· sponsi eness and eliabili y', lowes (mean sco e 5.0 and s anda d de ia ion 0.9). The esponden s indica ed, on a se en-poin scale o he o e all ins umen , a mean ac ual se ice le el o 4.4 (s and~ a d de ia ion 1.0). The i em wi h he highes expe ience se ice le el was 'ensu ing ha sound inancial con ols a e S A J.Bus.Manage 1999,30(2) in place', wi h a mean sco e o 5 .4 and a s anda d de ia ion o 1.4. The i em wi h he lowes expe ienced se ice le el was •u ilizing he bes ex e nal ad ice and assis ance', wi h a mean sco e o 4.0 and a s anda d de ia ion o 1.2. The dimen- sion 'boa d capaci y' eco ded he highes expe ienced mean sco e o 4.8 (s anda d de ia ion I. I), wi h 'di ec ing and moni o ing' second (mean sco e 4.5 and s anda d de ia ion 1.0), and 'assu ance' hi d (mean sco e 4.4 and s anda d de i- a ion I. I). 'Responsi eness and eliabili y' ecei ed he low- es mean sco e o 4.2, wi h a s anda d de ia ion o 1.2. Pa asu aman e al. (1994: 202) ecommend ha se ice be assessed by sub ac ing he desi ed se ice le el om he ex- pe ienced se ice le el. This should be done no only o each i em bu also o each dimension and o he o e all ins u- men , wi h he answe called he measu e o se ice supe io - i y (MSS). In i ems and dimensions whe e his measu e gi es a posi i e answe he expe ienced se ice le el exceeds he desi ed se ice le el. In i ems and dimensions whe e his measu e gi es a nega i e answe he expe ienced se ice le el is lowe han he desi ed se ice le el. The calcula ed MSS o he o e all assessmen esul ed in a mean se ice le el o -1.9 (s anda d de ia ion 1.0). This im- plies ha he mean expe ienced se ice ell sho o he ex- pec ed se ice by I . 9 when measu ed on a se en-poin scale. Wi hou excep ion he se ice le el in all i ems ell sho o he desi ed expec a ion when he MSS was used. The i em wi h he leas nega i e sco e was 'ensu ing ha sound inan- cial con ols a e in place', wi h a mean sco e o -I.I and a s anda d de ia ion o 1.3. Th ee i ems eco ded he same hi d mos nega i e sco e o -2.3, namely 'adding alue h ough hei s a egic guidance' (s anda d de ia ion 1.3), 'p omp - ness in aking go e nance ac ion' (s anda d de ia ion 1.5) and 'go e ning con inually and no only when con enien ' (s and- a d de ia ion 1.5). The i em 'dependabili y in handling s ake- holde 's p oblems' eco ded he second mos nega i e sco e o -2.4, wi h a s anda d de ia ion o 1.5. The i em 'ha ing he knowledge o op imally go e n' eco ded he mos nega i e sco e, namely -2.5 wi h a s anda d de ia ion o 1.7. Rega d- ing dimensionali y, wi hou excep ion he se ice le el in all ou dimensions ell sho o he desi ed expec a ion when he MSS was used. The dimension wi h he leas nega i e sco e was 'boa d capaci y', wi h a mean sco e o -1.6 and a s and- a d de ia ion o 1.1. The dimension wi h he second leas nega i e sco e was 'di ec ing and moni o ing', wi h a mean sco e o -1.8 and a s anda d de ia ion o 1.1. The dimension wi h he second highes nega i e sco e was 'assu ance', wi h a mean sco e o -1.9 and a s anda d de ia ion o 1.2. The di- mension wi h he highes nega i e sco e was ' esponsi eness and eliabili y', wi h a mean sco e o -2.1 and a s anda d de- ia ion o 1.2. Pa asu aman e al. ( 1994: 202) ecommend ha se ice u - he be assessed by sub ac ing he lowes accep able se ice le el om he expe ienced se ice le el. This should be done no only o each i em bu also o each dimension and o he o e all ins umen wi h he answe called he measu e o se ice adequacy (MSA). In i ems and dimensions whe e his measu e gi es a posi i e answe he expe ienced se ice le el :xceeds he lowes accep able se ice le el. In i ems and di- inensions whe e his measu e gi es a nega i e answe he ex- pe ienced se ice le el is lowe han he lowes accep able se ice le el. The calcula ed MSA o he o e all assessmen esul ed in a mean se ice le el o -0.9 (s anda d de ia ion 1.2). This im- plies ha he mean expe ienced se ice ell sho o he low- es accep able se ice by 0.9 when measu ed on a se en-poin scale. Wi hou excep ion, when measu ed agains his low- e ed s anda d, he se ice le el in all i ems s ill ell sho o he lowes accep <;1ble expec a ion when he MSA was used. The wo i ems ha had he same leas nega i e mean sco e o -0.2 we e 'deli e ing angible bene i s by knowing impo an people' (s anda d de ia ion 2.0) and ·willingness o help s akeholde s' (s anda d de ia ion 1.4 ). Th ee i ems eco ded he same hi d mos nega i e sco e o - I. I, namely 'disallow- ing each o he p i a e, hidden agendas· (s anda d de ia ion 1.6), 'p omp ness in aking go e nance ac ion' (s anda d de- ia ion 1.8) and 'go e ning con inually and no only when con enien ' (s anda d de ia ion 1.9). Two i ems eco ded he same second mos nega i e mean sco e o -1.2, namely 'ha - ing he con idence o s akeholde s· (s anda d de ia ion 1.5) and 'being always p ope ly p epa ed o mee ings· (s anda d de ia ion 1.7). The i em "ha ing he knowledge o op imally go e n' eco ded he mos nega i e mean sco e, namely -1.5, wi h a s anda d de ia ion o 1.8. Rega ding dimensionali y, wi hou excep ion he se ice le el in all ou dimensions ell sho o he desi ed expec a ion when he MSA was used. Th ee dimensions eco ded he same nega i e mean sco e o -0.8, wi h 'di ec ing and moni o ing' and 'boa d capaci y' ha ing s anda d de ia ions o I .2 and ·assu ance· ha ing a s anda d de ia ion o 1.4. The dimension wi h he highes nega i e sco e was ' esponsi eness and eliabili y', wi h a mean sco e o -1.5 and a s anda d de ia ion o 1.8. Resul s: he quali y o co po a e go e nance in lis ed indus ial companies The indings o he assessmen o he quali y o co po a e go e nance in lis ed indus ial companies a e ully se ou in Annexu e 5. The esponden s indica ed, on a se en-poin scale, an o e - all mean desi ed se ice le el o 6.2 (s anda d de ia ion 0.5). The wo i ems wi h he highes desi ed se i..:e le el o 6.8 we e 'displaying impeccable in eg i y and hones y', wi h a s anda d de ia ion o 0.6, and 'p e en ing he CEO om mis- leading he boa d', wi h a s anda d de ia ion o 0.4. The i em wi h he lowes desi ed se ice le el was 'se ing on he boa d o an op imal pe iod only', wi h a mean sco e o 5.1 and a s anda d de ia ion o 1.4. The dimensions 'assu ance' (s anda d de ia ion 0.5) and ' esponsi eness and eliabili y' (s anda d de ia ion 0.6) eco ded he highes desi ed mean sco e o 6.4, wi h 'di ec ing and moni o ing' eco ding 6.3 (s anda d de ia ion 0.5) and 'boa d capaci y' eco ding 5.9 (s anda d de ia ion 0. 7). The esponden s indica ed, on a se en-poin scale o he o e all ins umen , a mean lowes accep able se ice le el o 4.9 (s anda d de ia ion 0.8). The i em wi h he highes mean sco e on his lowes accep able se ice le el was 'displaying impeccable in eg i y and hones y', wi h a mean sco e o 6.1 and a s anda d de ia ion o 1.2. The i em ha sco ed he low- es in his ca ego y was 'se ing on he boa d o an op imal pe iod only', wi h a mean sco e o 3. 7 and a s anda d 52 de ia ion o 1.5. The dimension ' esponsi eness and eliabil- i y' eco ded he highes mean sco e on his lowes accep able scale, namely 5.1 (s anda d de ia ion 1.0) wi h 'di ec ing and moni o ing' and 'assu ance' (s anda d de ia ions bo h 0.9) e- co ding a mean sco e o 5.0 and 'boa d capaci y' eco ding he lowes sco e (mean sco e 4.6 and s anda d de ia ion 1.0). The esponden s indica ed, on a se en-poin scale, an o e - all mean ac ual se ice le el o 5.4 (s anda d de ia ion 0.9). The i em wi h he highes expe ienced se ice le el was 'dis- playing impeccable in eg i y and hones y', wi h a mean sco e o 6.4 and a s anda d de ia ion o 1.2. The i em wi h he low- es expe ienced se ice le el was 'p o iding di e si y h ough biog aphical composi ion', wi h a mean sco e o 4.1 and a s anda d de ia ion o 1.2. The dimension ' esponsi e- ness and eliabili y' eco ded he highes expe ienced mean sco e o 5.7 (s anda d de ia ion 0.7), wi h 'di ec ing and moni o ing' (s anda d de ia ion 0.9) and 'assu ance' (s and- a d de ia ion 1.0) a 5.5. 'Boa d capaci y' eco ded he lowes mean sco e o 5.0, wi h a s anda d de ia ion o 0.9. As explained unde he public en i ies sec ion, Pa asu aman e al. ( 1994: 202) ecommend ha se ice be assessed by sub- ac ing he desi ed se ice le el om he expe ienced se ice le el. This should be done no only o each i em bu also o each dimension and o he o e all ins umen , wi h he an- swe called he measu e o se ice supe io i y (MSS). In i ems and dimensions whe e his measu e gi es a posi i e an- swe he expe ienced se ice le el exceeds he desi ed se ice le el. In i ems and dimensions whe e his measu e gi es a nega i e answe he expe ienced se ice le el is lowe han he desi ed se ice le el. The calcula ed MSS o he o e all assessmen esul ed in a mean se ice le el o --0.8 (s anda d de ia ion 0.8). This im- plies ha he mean expe ienced se ice ell sho o he ex- pec ed se ice by 0.8 when measu ed on a se en-poin scale. Wi hou excep ion he se ice le el in all i ems ell sho o he desi ed expec a ion when he MSS was used. The h ee i ems wi h he same leas nega i e sco e o --0.4 we e 'dis- playing impeccable in eg i y and hones y' (s anda d de ia ion 1.0), 'ha ing membe s wi h expe inancial knowledge' (s anda d de ia ion 1.1) and 'ha ing he op imal a io execu- i es/non-execu i es' (s anda d de ia ion o 1.4). The i em 'p o iding di e si y h ough biog aph_ical composi ion' e- co ded he mos nega i e sco e, namely -1.2, wi h a s anda d de ia ion o 1.6. Rega ding dimensionali y, wi hou excep ion he se ice le el in all ou :.dimensions ell sho o he de- si ed expec a ion when he MSS was used. The wo dimen- sions wi h he same leas nega i e sco e o -0. 7 we e 'di ec ing and moni o ing' and ' esponsi eness and eliabil- i y', bo h wi h s anda d de ia ions o o·:9. The dimension 'boa d capaci y' eco ded a sco e o -0.8 and 'assu ance' a sco e o --0.9, again bo h wi h a s anda d de ia ion o 0.9. Pa asu aman e al. ( 1994: 202) ecommend ha se ice u - he be assessed by sub ac ing he lowes accep able se ice le el om he expe ienced se ice le el. This should be done no only o each i em bu also o each dimension and o he o e all ins umen , wi h he answe called he measu e o se ice adequacy (MSA). In i ems and dimensions whe e his measu e gi es a posi i e answe he expe ienced se ice le el exceeds he lowes accep able se ice le el. In i ems and di- mensions whe e his measu e gi es a nega i e answe he ex- S A l .J Bus Managc.1999.30(2) pe ienced se ice le el is lowe han he lowes accep able se ice le el. The cakula ed MS~ o he o e all assessmen esul ed in a mean se ice le el o +0.5 (s anda d de ia ion o 9) Th. · . . · · IS 1m. phes ha he mean expe ienced se ice exceeded he I . owes accep able se ice by 0.5 when measu ed on a se en- · I W. h . h poin sea e. 1 ou excep ion, w en measu ed agains his low. e ed s anda d, he se ice le el in all i ems exceeded he low. es accep able expec a ion when he MSA was used. The wo i ems ha had he mos posi i e mean sco e we e 'a oidin con lic wi h pe sonal in e es s' (mean sco e + 1.3 and s anl a d de ia ion 1.4) and 'p o iding adequa e ne wo king' (mean sco e + 1.1 and s anda d de ia ion I. 6). Th ee i ems e· co ded he same leas posi i e sco e o +0.1 (all wi h s anda d de ia ions 1.4 o 1.5), namely 'disallowing each o he p i· a e, hidden agendas'. 'being always p ope ly p epa ed o mee ings' and 'doing hei homewo k ho oughly'. Th ee di- mensions eco ded he same posi i e mean sco e o +0.5, wi h 'di ec ing and moni o ing' ha ing a s anda d de ia ion o 1.0, 'boa d capaci y' ha ing a s anda d de ia ion o I.I and 'assu ance' ha ing a s anda d de ia ion o 1.2. The dimen- sion wi h he highes posi i e sco e was ' esponsi eness and eliabili y', wi h a mean sco e o +0.6 and a s anda d de ia· ion o 1.0. Compa ison o he zones o ole ance and ac ual se ice in he wo sec o s Pa asu aman e al. ( 1994: 202) epo ha a desi ed se ice le el and an adequa e se ice le el a e sepa a ed by a zone o ole ance. This a ea ep esen s he ange o se ice pe onnance ha is ega ded as accep able. In Pa asu aman e al. 's (1994: 216) assessmen o he se ice le els o ou companies, he wid h o he zones o ole ance in he dimensions a e jus o e one on a nine-poin scale. The esponden s' o e all mean ole ance was l.05 o he public en i ies and 1.27 o he lis ed indus ial companies. The zones o ole ance in he ou dimensions a e indica ed in Table I. Judging by he zones o ole ance epo ed by Pa asu a nan e al. (I 994: 216, Figu e I), ha is app oxima ely one on a nine-poin scale in espec o he li e insu ance company, he Sou h A ican esponden s we e a leas as oie an as hose in he Uni ed S a es. The poo MSA sco es epo ed o he non· execu i e di ec o s in public en i ies a e he e o e no a esul o in ole ance on he pa o he Sou h A ican esponden s. The ac ual se ice is he poin in issue. A g aphical summa y o hese indings is gi en in Figu e I. As can be seen om Figu e I, he co po a e go e nance se ice o he public en i y non-execu i e di ec o s was in all dimensions a a le el below he zone o ole ance. The se ice Table 1 Zones o ole ance in he ou dimensions Dimension Di ec ing and moni o ing Boa d capaci y Assu ance Responsi eness Mean zone o ole ance Public en i ies 10 0.8 I I I 3 Lis ed companies IJ IJ 1.4 IJ ,A .JBus.Manage J 999.30(2) 53 7.0 8.5 I 8.0 I I I 5.5 G) ~ 5.0 a en I Desi ed C> 4.5 a c a a Lowes ;: as a a::: 4.0 a Ac ual Dimensions Figu e I Zone o ole ance and a ing o he di ec o s in he lis ed indus ial companies was in all dimensions inside he zone o ole ance. In e na ional compa ison Se ice quali y can p obably bes be assessed i he esul s a e compa ed wi h he esul s o simila s udies o se ice quali y in o he se ice indus ies. Chu chill ( 1979: 72) sees :his as he inal s ep in de eloping a alid ins umen . In o de o u he analyze he esul s o hese assessmen s o co po a e go e nance se ice, he esul s we e compa ed wi h he esul s o assessmen s o se ice whe e SERVQUAL was used. The compa isons we e done on wo le els, namely he measu e o se ice supe io i y and he measu e o se ice adequacy. Two se s o published assessmen s o se ice a he MSS le el whe e SERVQUAL was used, we e compa ed wi h he assessmen o co po a e go e nance se ice a he MSS le el in public en i ies and in lis ed indus ial companies. Pa asu - aman e al. (1993: 147), ead alongside Pa asu aman e al. (1991: 446), p oduced an MSS assessmen o an insu ance company on a se en-poin scale. This assessmen is com- pa ed in Table 2 wi h he assessmen o co po a e go e n- ance se ice. Al hough he dimensions we e no he same, he insu ance company managed o gi e supe io se ice in one o he di- mensions. The wo s assessmen o he insu ance company, namely -1.6, was he same as he bes assessmen ecei ed by he public en i y non-execu i e di ec o s. The wo s as- sessmen ecei ed by he public en i y di ec o s (-2.1) was ;ubs an ially wo se han ha ecei ed by he insu ance com- pany (-1.6). The lis ed company di ec o s, on he o he hand, al hough s ill eco ding nega i e indings a his high expec ed se ice le el, ou pe o med he insu ance and pub- lic en i y sec o s - he la e by a . He be ( 1994: 17) epo s lib a y se ice indings using SERVQUAL as an ins umen . He be 's esul s and he co - no a e go e nance indings a e compa ed in Table 3. In hei bes dimension he lib a y se ice was supe io by 1.2 while public en i y non-execu i e di ec o s ell sho by 1.6 on hei s. Public en i y non-execu i e di ec o s also did subs an ially wo se in hei bes dimension han he lib a y se ice p o ide s in hei wo s dimension. Lis ed company di ec o s eco ded a a be e se ice han he public en i y non-execu i e di ec o s bu s ill did no ende any supe io se ice. This shows conclusi ely ha , using MSS as a ya ds ick. public en i y non-execu i e di ec o s did no deli e any su- pe io se ice in he measu ed dimensions. When compa ed wi h simila s udies, o he se ice p o ide s ende ed supe io se ice in one o he measu ed dimensions. The public en i y non-execu i e di ec o s' se ice was a ed subs an ially wo se han o he compa able se ices ha had been epo ed on. The lis ed company di ec o s also did no ende any su- pe io se ice on any o he dimensions bu hei se ice was ne e heless subs an ially be e han ha o he public en i y di ec o s. Pa asu aman e al. ( 1994: 217) epo he se ice assess- men s o ou companies a he MSA le el. As hese assess- men s we e done on a nine-poin scale, a compa ison wi h he co po a e go e nance se ice (done on a se en-poin scale) Table 2 Assessmen o co po a e go e nance se ice Dimension Tangibles Assu ance Empa hy Responsi eness Reliabili y Responsi eness and eliabili y Boa d capaci y Di ec ing and moni o ing Insu ance 0.0 -1.0 -I. I -JJ -1.6 Co po a e go e nance Public en i ies Lis ed companies -1.9 -0.9 -2.1 -0.7 -1.6 -0.8 -1.8 -0.7 Table 3 Compa ison o He be 's esul s and he co P.o a e go e nance indings Dimension Tangibles Assu ance Empa hy Responsi eness Reliabili y Responsi eness and eliabili y Di ec ing and moni o ing Boa d capaci y Lib a y +1.2 -0.57 -0.68 -0.77 -1.10 Co po a e go e nance Public en i ies Lis ed companies -1.9 -0.9 -2.1 -0.7 -1.8 -0.7 -1.6 -0.8 Table 4 Compa isons wi h he co po a e go e nance se ice Dimension ITCO Re ail Au o Insu e Co po a e go e nance Public Lis ed en i ies companies Tangibles +1.5 +0.6 +0.8 +0.5 Assu ance +0.6 -0.2 +0.5 +0.2 -0.8 +0.5 Responsi eness +0.4 -0.4 +0.5 +0.2 Reliabili y +0.3 -0.5 +0.3 +0.2 Responsi eness -0.9 +0.6 and eliabili y Empa hy +0.3 -0.4 +0.4 +0.2 Di ec ing and -0.8 +0.5 moni o ing Boa d capaci y -0.8 +0.5 should a ou he co po a e go e nance se ice. This compa - ison is shown in Table 4. A his lowe le el o se ice expec a ion he measu e o se ice adequacy (MSA) le el h ee o he ou companies, as well as he lis ed en i y di ec o s, p o ided he se ice a leas adequa ely in all he measu ed dimensions. The se ice o he company a ed wo s s ill ou pe o med he public en i y non- execu i e di ec o s' se ice as i was a ed mo e han ade- qua e in one dimension while in i s wo s - a ed dimension i did be e han he publi~ en i y non-execu i e di ec o s in hei bes dimension. The non-execu i e di ec o s' se ice in public en i ies was a ed as unaccep able in all he measu ed dimensions by a subs an ial ma gin, while he lis ed company di ec o s, se ice was a ed as accep abl~. Re e ences Babakus, E. & Bolle , G.W. 1992. An empi ical assessmen o he SERV- QUAL scale, Jou nal o Business Resea ch, 24: 253-268. Bu le , J. 1991. Co po a e go e nance -who needs i ? Accoun ancy, 108: 24-25. B yne, J.A. 1996. The bes and wo s boa ds, Business Week. 25 No em- be : 62-68,. Ca man M .C. 1990. 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Expec a ions as a compa ison s anda d in measu ing se ice quali y: an assessmen o a eassessmen , Jou nal o Ma ke ing. 58: 132-139. . d Van Wyk, M.F. 1998. Se ice quali y measu emen o non-execuu e 1 • ec o s in public en i ies. Ph O hesis. Johannesbu g: Rand A ikaans Uni e si y. I 73p. . . I· Whi e, M.D. & Abels, E.G. 199;. Measu ing se ice quali y m speci~l I b a ies: lessons om se ice ma ke ing. Special Ub a ies, 86( I): J6-- 4~ ~.A .J.Bus.Manage 999,30(2) Annexu e 1 Answe s will be ea ed as con iden ial and will be used o s a is ical pu poses only Please indica e you pe cep ion o( he boa d's se ice ega ding: My desi ed se ice My lowes accep able se ice le el Boa d's ac ual se ice le el O lke ·. le el ····. > . . .. · . .) Low High Please enci cle Low High Please enci cle Low High Please enci cle 1234567 I 2 3 4 5 6 7 1234567 I. Being independen ( e.g. no ex- employees, supplie s) 1-c-2.---:D::::e-pe-n-:da-:b:--:i-:-:-li-:-- y--:m---;-h-an-d-:-;lin::--. -g-+-=-1-=2:-::-3-4:-::-5-6:-=-7 --+-4-1-2_3_4_5_6_7 ---l---l--1-2_3 _4_5_6_7 __ -J oi.:o,/ i sha eholde s' p oblems ••· ? 1-:---:-:----,----:-;----;-;----:-:-.---:- -:--:--::--:--:--:--::---- --+---------Jl--+--------I 3. Knowing he p oblems oi he 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7 ilO:Cl? ·· indus y 4. P o iding he go e nance I 2 3 4 5 6 7 I 2 3 4 5 6 7 1234567 . , .. ~5-. --~-:_:_·:_'._:""_:_:_:_:_gh; __ ~-~-~-"~_ h _)_ou-gh-.+-l-2_3_4_5_6_7----+-+-l-2-3_4_5_6_7 __ _._--i~l-2-3-4-5-6-7---11!(} ili 6. In o ming sha eholde s abou 1 2 3 4 5 6 7 I 2 3 4 5 6 7 1 2 3 4 5 6 7 u, ) hei go e nance • ( ~7_--P- _o_m_p_ n_es_s--~,n--- akm-,-.-g-+-1-2_3_4_5_6_7----+-+-l-2-3_4_5_6_7 __ _._--i~l-2-3-4-~---6-7--~./~ ••••••• ;: l---go_ _e_ n_an_c_e_a_c_ i_o_ns _____ - --------+--+--------+---il----------i ~ 4 ~ 8. Willingness o help 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7 sha eholde s ,c-J ilii! 1--9-. -~R-ea-din~.-es-s-- o-- e_sp_o-nd-- o-+.-1--23_4_5 __ 6_7---+-+-1--=-2-:J-4--5-6---:7----+---il--1-2--34---=-5-6---=-1---1[;8:}), sha eholde s' eques s C ./ 1--~--~~~~~~--+~~~~~-+--+-~~~~- -- -~~~~---- ) Ha ing he con idence o I 2 3 4 5 6 7 I 2 3 4 5 6 7 1 2 3 4 5 6 7 i:•.•1:.1·•1- ··.,~ ..... •••• 10. ( -} ·•· sha eholde s )> 1--------------+--------+--+---------+--1-------:-5-6,....-::-7--~i~.~~ ,_l_l._M_akin_· _g_s_h_a _e_h_o-ld_e_ s_ e_e_l_s_a_ e--l--1-2_3_4_5_6_7--+-4-:1-2::-:-3-4:-=-5-:6:-=-7--+--+-:-1-:2--:-J-:4--:--=--:--- lli •. ·I ..... i - wi h hei go e nance 12. P e en ing he CEO om 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7 misleading he boa d ·.·•· .. · 13. Ha ing he knowledge o 1 2 3 4 5 6 7 I 2 3 4 5 6 7 1 2 3 4 5 6 7 i ~ go e n op imally [ ~----------------+------""".'.""--+-- -:--:--::-:--:--;-:7~-- - -:-1-:2;--;-3~4;--;5~6~7--iLi . ..,,··~···~ < 14. P o iding com niunen h ough 1 2 3 4 5 6 7 I 2 3 4 5 6 l i ii equi y pa icipa ion Iii Independence om execuu es 1 2 3 4 5 6 7 I 2 3 4 5 6 7 I 2 3 4 5 6 7 o in o ma ion ? 15. 16. Being uly a sha eholde I 2 3 4 5 6 7 appoinunen 17. Unde s anding wha IS 1234567 1 2 3 4 5 6 7 1234567 ,.,.. .. 1 2 3 4 5 6 7 1234567 I• 17 -=----:cex~pe_c_ e_d_ _-o_m.:.:...:g~o- _e n __ o_ s ___ i__~--::-:--::-~-+--+-:-:;-;-;--;-:;--:;---- --l ;--;-:;-:j~,Z-;:;----1,1 .. .......:.~·'J ~ 8 I 2 3 4 5 6 7 1 2 3 4 5 6 7 •· l- ~l~.-~G-o~ e_nun_·_g-co_n_ _m_ual_l_y_an_d_no- -!--1-2-3-4-5-6-7~~-+- --:--:---:;--;-;-;---:;----j -i"";-:;-:;-~~~--i>~!:(ij only when con enien iIJs:: 19 I 2 3 4 5 6 7 I 2 3 4 5 6 7 . Deli e ing angible bene!i s I 2 3 4 5 6 7 : 5 knowing impo an people ••·· : b2 Annexu e 4 S M J Bus.Manage. 1999 ~1 PUBLIC ENTITIES MEASURE OF SERVICE SUPERIORITY: VARIABLES NUMBERS TWO AND THREE Indi idual scale Recommend P oblem dimensions Yes No Yes No Di ec ing & moni o ing -1.13• -2,57° -2.12• -1.57 • Boa d capaci y -0,97 1 -2,36° -2.38° -1,07 • Assu ance -1,17 1 -3,04° -2.50 • -1,75 • Responsi eness & eliab -1.18 • -2,52° -2,28 • -1.47 • Combined scale -1,15 • -2,75 • -2,31 • -1.60 1 MEASURE OF SERVICE ADEQUACY: VARIABLES NUMBERS TWO AND THREE Indi idual scale Recommend P oblem dimensions Yes No Yes No Di ec ing & moni o ing 0.02• -1,60" -1.20• -0,42 • Boa d capaci y 0.03• -1,62" -1,52° -0.22 • Assu ance 0,26 • -1,84 • -1, 13 • -0.51 • Responsi eness & eliab 0.22• -1,54 • -1,14° -0, 14 • Combined scale 0,09 1 -1,80 • -1.20• -0,47 • LISTED CO!VlPANIES 1EASURE OF SERVICE SUPERJORlTY: VARIABLES NUMBERS TWO AND THREE Indi idual scale Recommend Que ied dimensions Yes Ma~ be No Yes No Di ec ing & moni o ing -0,52• -0,88 • -2,53 • -0,62 • -1, 13 • Boa d capaci y -0,65 • -0,75. -2,64 • -0,66 • -1,55 • Assu ance -0.51 • -0,74 • -2,06 • -0,63 • -0.96 • Responsi eness & eliab -0.56 1 -0,92 • -2,38 • -0,73 • -1.08• Combined scale -0,54 1 -0,90 • -2,62 • -0,66 • -1, 12 • MEASURE OF SERVICE ADEQUACY: VARIABLES NUMBERS TWO AND THREE Indi idual scale Recommend Que ied dimensions Yes Ma~ be No Yes No Di ec ing & moni o ing 0.71• 0,541 -1,23° 0.12• -0. 13 • Boa d capaci y o.n• 0,6 1 -1,67° 0,86 1 -0,60° Assu ance 0,81 • 0,64 1 -0,81 • 0.81 • -0,02 • Responsi eness & eliab 0.76 • o.s2• -1,63° -0,67. -0.16° Combined scale 0,72 1 o.s3• -1,24 • 0,71 • -0.07° No es: • , • = Means wi h he same supe sc ip s a e no signi ican ly di e en o each dimension and means wi h di e en supe sc ip s a e signi ican ly di e en o each dimension. Signi ican di e ences in mean scale alues o esponden s (O= indi e ence) • segmen ed acco ding o he o e all quali y a iables Numbe s wo and h ee ~ < J.Bus.Managc 1999.30(2) Annexu e 5 LISTED COMPANIES Mean Sco es (MS) and S anda d De ia ion (SD) S a emen Desi ed Lowes Ac ual MSS MSA accep able MS SD MS SD MS SD MS SD MS SD Di ec ing & moni o ina - o e all mean sco es 6,3 0,5 5,0 0,9 5,5 0,9 -0,7 0,9 0,5 1,0 18 Go e ning con inually and no only when con enien 6,4 0,8 5.2 1.2 5,7 1,2 -0.7 1.2 0.5 1,3 21 P o idino adequa e ne wo kino 5,5 1.2 3,8 1,5 4,9 1,3 -0.7 1,3 1,1 1,6 23 Being balanced in composi ion inancial. leoal 6,1 0,9 4,6 1.2 5,2 1,2 -0.9 1.3 0.7 1,5 30 Adding alue h ouoh hei s a eoic auidance 6.2 0.9 4,8 1,4 5,3 1,2 -0.9 1,3 0.5 1,6 31 U ilising he bes ex e nal ad ice and assis ance 6,1 0.8 4,7 1,2 5.5 1,3 -0.7 1,3 0,8 1,3 34 Ha ing membe s wi h expe inancial knowledoe 6.3 0,8 5,2 1,2 5,6 1,0 -0.4 1, 1 0.7 1,2 36 Ensu ino ha sound inancial con ols a e in place 6.7 0,6 5,8 1,3 6.2 0,9 -0.5 0,8 0,4 1,0 37 Beino always p ope ly p epa ed o mee inos 6.6 0,6 5,6 1,2 5.7 1,0 -0.9 1,0 0,1 1.5 39 Knowinq wha in o 1s needed o qo e n and oe ino i 6,2 0,7 4,9 1,2 5.5 1,0 -0.7 1,0 0.6 1,2 40 Ensu ing he o qanisa ional objec i es a e me 6,3 0,8 5,1 1,3 5,6 1,0 -0.7 1.0 0.6 1.2 41 Takino poli ically unpopula ac ion when needed 6.2 0,9 5,1 1,3 5,4 1,3 -0.8 1.1 0,4 1.3 43 Willingness o sha e business isk 5,8 1,0 4,4 1,3 5.2 1,1 -0.5 1,2 0.8 1.2 49 Doino hei homewo k ho ouohl 6,4 0,8 5,4 1,2 5.5 1,3 -1.0 1,3 0.1 1,4 51 A oiding con lic wi h pe sonal in e es s 6.6 0,7 5,6 1,3 5,7 1,3 -0.9 1, 1 1.3 1,4 52 Displaying ca e and skill as wi h own a ai s 6.5 0,9 5,5 1,3 5,9 1,1 -0.5 0,8 0.4 1,1 Boa d caoaci 5,9 0,7 4,6 1,0 5,0 0,9 -0,B 1,0 0,5 1, 1 3 Knowino he p oblems o he indus y 6,6 0,7 5.1 1,2 5.8 1,1 -0.8 1.0 0.8 1,3 15 Independence om execu i es o in o ma ion 5,8 0.9 4.2 1.4 5,1 1,1 -0.7 1, 1 0.9 1,3 16 Beino uly a sha eholde appoin men 5,5 1,3 4,1 6.7 4.8 1,8 -0.7 1,8 0.6 1,9 22 Disallowing each o he p i a e con lic ing agendas 6.5 0,9 5.5 1.4 5.6 1.4 -0.9 1,4 0.1 1,4 32 Se ino on he boa d o an op imal oe iod onl 5.1 1,4 3,7 1,5 4.2 1.5 -0.9 1,5 0.5 1,8 46 Asking app op ia e 1n elliqen ques ions 6,3 0.8 5.3 1,3 5.5 1.3 -0.8 1,2 0.2 1,3 50 P o iding di e si y h ough biog aphical composi ion 5.3 1.5 3,8 1,6 4.1 1,5 -1.2 1,6 0,4 1,6 53 Ha ino he op imal a io execu i es I non-execu i es 5,8 1,3 4,7 1,5 5.4 1,3 -0.4 1,4 0,7 1.3 Assu ance 6,4 0,5 5,0 0,9 5,5 1,0 -0,9 0,9 0,5 1,2 7 P omp ness 1n akino oo e nance ac ion 6.2 0.8 4,7 1,2 5.3 1.2 -0.9 1.1 0.6 1.0 11 Making sha eholde s eel sa e wi h hei oo e nance 6,4 0.7 4.9 1,2 5,6 1,2 -0.8 1.0 0,7 1.3 12 P e en ino he CEO om m1sleadinq he boa d 6,8 0.4 5,9 1,0 6.2 1,2 -0.7 1.2 0.3 1,4 13 Ha ino he knowledge o op imally oo e n 6.4 0,7 5.0 1,0 5.5 1,1 -0.9 1,0 0.6 1.3 24 Beino asse i e (no ubbe s amps) wi h he CEO 6,4 0.8 4.9 1.2 5.5 1,3 -0.9 1,4 0.6 1,6 26 P o iding o e all di ec ion o he CEO 6,1 1.0 4,6 1,3 5.2 1,4 -0.9 1,3 0.6 1,6 27 P ope ly moni o ino he CEO 6.2 0,8 4.9 1,4 5.3 1,3 -0.9 1.4 i 0.4 1.8 Resoonsi eness & eliabili y 6,4 0,6 5, 1 1,0 5,7 1,0 -0.7 0,9 0,6 1,0 2 Dependabili y in handlino s akeholde s· p oblems 6,4 0,8 4,8 1,3 5.6 1,3 -0.8 1.2 0.7 1,3 4 P o iding he go e nance se ice a he ioh ime 6.2 0,8 4.7 1.3 5.3 1.2 -0.9 1.1 0.7 1,3 8 Willinqness o help s akeholde s 6,3 0.9 4,8 1,4 5,5 1,2 -0.7 1,0 0,8 1,2 9 Readiness o espond o s akeholde s· eques s 6.2 0,8 4,9 1,4 5,6 1,3 -0.6 1.1 0.7 1.2 10 Ha ino he con idence o sha eholde s 6,5 0.7 5.2 1,2 5.7 1,3 -0.8 1,3 0.6 1.4 33 Displayinq impeccable in eon y, hones : own claims 6.8 0.6 6,1 1.2 6.4 1,2 -0.4 1,0 0.3 1,3 JSE-ECGSI o e all mean sco es 8,2 0,5 4,9 0,8 5,4 0,9 -0,B 0,8 0,5 0,9 Numbe s e e o he ques ion numbe s in he o iginal ins umen and a e p o ided o e e ence pu poses S A J Bus Managc.1999.J~l) Annexu e 5 (con .) PUBLIC ENTITIES Mean Sco es (MS) and S anda d De ia ion (SD) - S a emen Desi ed Lowes Ac ual MSS MSA - accep able pe cep io n MS SD MS SD MS so MS SD MS so Di ec ina & moni o lna - o e all mean sco es 6,3 0,5 5,3 0,1 4,5 1,0 -1,1 1, 1 -01 1.z- 24 Bemo asse i e (no ubbe s amos w h he CEO 6.2 0.9 5,1 1,3 4,8 1.3 -1,4 1 4 -0,3 1,6- 36 Ensunna ha sound inancial con ols a e in place 6.6 0.8 5,9 1, 1 5,4 1,4 -1, 1 1,3 -0,4 1,5- 46 Askma aoo oona e, in e liaen ques ions 6.2 0.8 5.2 1, 1 4,5 1,3 -1,7 1,4 -0,7 1,7 54 Measunno he en i 's ou ou 6.3 0.7 5,3 1, 1 4.7 1,3 -1,6 1,4 -0,7 14 27 P ope y moni onnQ he CEO 6.1 0,8 5.1 1, 1 4,4 1.3 -1,7 1,4 -0,8 1,5 31 U ihs1na he bes ex e nal ad ice and assis ance 5.9 1.1 4,8 1,1 4,0 1.2 -1.9 1,4 -0,8 1,5 40 Ensunnq he o aamsa ional objec i es a e me 6.2 1.0 5.0 1,3 4.2 1.2 -2.0 1.2 -0,8 1,4 53 D1solay1nQ ca e and skill as wi h hei own a ai s 6.4 0.7 5.6 1,1 4,8 1.2 -1,7 1.3 -0,8 1,4 55 P e en 1na he CEO om misleadinCJ he boa d 6.6 0.7 5.8 0,9 5.0 1,5 -1,5 1,5 -0,8 1.7 26 P o 1dino o e all di ec ion o he CEO 6.5 0.6 5.4 1,0 4.5 1,4 -2.0 1.5 -0.9 1,7 39 Know1na wha in o is needed o ao e n and ge ina 1 6.2 0.7 5,1 1.0 4.1 1.2 -2,1 1,2 -0,9 1,5 41 Tak1na poli icall unoooula ac ion when needed 6.3 0.7 5.2 1.2 4,2 1,7 -2.1 1,7 -0,9 2,1 49 Doino hei homewo k ho ouohl 6.4 0,6 5,4 0.9 4,4 1,3 -2.0 1,3 -1.0 16 37 Be1na alwa s p ope o eoa ed o mee ings 6.5 0.6 5.5 1,0 4,3 1,5 -2,1 1,4 -1.2 1.7 Boa d capaci y 6,5 0,5 5,7 0,7 4,B 1, 1 -1,6 1, 1 -0,8 1,2 23 Bemo balanced 1n comoOS1 ion (e.g. inancial. legal) 5.3 0.8 5.0 1.0 4,7 1.2 -1.6 1,3 -0.3 1,5 34 Ha 1na membe s wi h exoe inancial knowledge 5.1 1.0 5.2 1, 1 4,8 1,4 -1.3 1,5 -0,4 1,5 33 Displaying impeccable in eg i y & hones y e.g. own 6.9 0,3 6,4 0,8 5,4 1.5 -1,4 1,5 -1,0 1,4 claims 52 A o1dina con lic wi h oe sonal in e es s 5.6 0.7 5.9 1,1 4,9 1,5 -1,7 1,5 -1,0 1,6 22 D1sa1lowinq each o he o i a e. connic ino aaendas 6.5 0.7 5.7 1.2 4,6 1.4 -1 9 1,3 -1, 1 1.6 Assu ance 6,3 0,5 5,2 0,B 4,4 1.1 -1,9 1,2 -0,I 1,4 19 Deil enng angible bene i s by knowing impo an 5.6 1,4 4,5 1,5 4,3 1,5 -1,4 2,0 -0,2 2,0 peocle 21 P o 1dina adeaua e ne wo king 6.0 0.8 4,8 1, 1 4,3 1.2 -1.7 1,2 -0,5 1,5 11 Malung he s akeholde s eel sa e wi h hei 6.6 0,7 5.5 1,2 4,6 1,4 -2,0 1.5 -0,9 1,8 ao e nance 30 Adding alue h ouoh hei s a egic guidance 5.6 0,5 5,3 0,9 4,2 1,3 -2,3 1,3 -1,0 1,7 10 Ha ,na he con idence o s akeholde s 6.6 0,6 5.7 0.8 4,5 1,4 -2,1 1,3 -1,2 1,5 Responsi eness & e/iabili 6,3 0,5 5,0 0,9 4,2 1,2 -2, 1 1,2 -0,9 1,5 8 Willinaness o helo s akeholde s 6.1 0.9 4.9 1 .1 4,7 1,3 -1,4 1.3 -0,2 1,4 9 Readiness o espond o s akeholde s' eaues s 5.0 0.8 4.8 1.1 4.4 1,3 -1,6 1.3 -0,3 1,4 4 P o 1dina he ao e nance se ice a he nah ime 5.2 0.8 4.8 1.2 4,0 1,5 -2,2 1,6 -0,8 1.9 2 Deoendab,li in handlina s akeholde s· p oblems 6.4 0.8 4.9 1.2 4,0 1,5 -2,4 1,5 -0,9 1,7 7 P omo ness in akina ao e nina ac ion 6.5 0.6 5.2 1,1 4,2 1,5 -2.3 1,5 -1.1 1,8 18 Go emino con inua l and no only when con enien 5.3 0.7 5.0 1.3 4,0 1,4 -2,3 1.5 -1,1 1,9 13 Ha 1na he knowledae o ao e n op imally 6.6 0.6 5.5 0.9 4,0 1,6 -2.5 1.7 -1.5 1,8 ECGS/ o e all mean sco es 6,3 0,4 5,3 0,1 4,4 1,0 -1,9 1,0 -0,9 1,2 Numbe s e e o he ques ion numbe s in he o iginal ins umen and a e o o ided o e e ence pu poses