Differentiated corporate governance drivers for respective spheres of government in South Africa

Purpose and motivation Despite challenges, public sectors worldwide are actively pursuing reforms, including efforts to enhance good corporate governance. The aim of this research was to determine whether differences exist in the root causes driving favourable audit outcomes, as a proxy for good corporate governance, within the three public sector spheres of South Africa, where it seems a differentiated approach to addressing challenges is required.Methodology Annual reports were analysed over a 13-year period. Performing quantitative analysis, binary logistic regression was performed for each of the three targeted groups, using the audit outcome as the dependent variable. Thereafter the three regression models were compared, emphasising that comparing the estimated coefficients of the binary regression models is informative.Results ‘Internal control weaknesses’ is the only statistically significant driver of sound corporate governance in all three spheres. Key drivers for the three spheres differ, indicating that different aspects drive sound corporate governance.Contribution The results can guide policymakers, oversight entities, and public sector entities in tailoring their corporate governance efforts to enhance the likelihood of favourable audit outcomes. Countries that can identify with the South African situation can repeat the study to identify areas for improvement in their own environments.