An Evaluation of Inclusive Governance Arrangements in South African Public Sector Organisations

Inclusive governance arrangements involve incorporating a wider range of stakeholders into governance structures to enhance organisational legitimacy. However, according to institutional theory, competing logics of various stakeholder groupings may compromise governance effectiveness. This paper aims to explore this tension between legitimacy and governance effectiveness in selected South African public entities. The first objective was to describe how inclusive governance arrangements in the National Economic Development and Labour Council (NEDLAC), the National Skills Authority (NSA) and Sector Education and Training Authorities (SETAs) have been established. An analysis of the legislation related to the establishment and functioning of these three entities illustrated how they reflected inclusive governance arrangements, and sought to balance the representation of government, employers and labour unions. In all three cases, inclusive governance had been achieved through legislation, which had set quotas for the composition of the membership of boards. The second objective was to analyse the effects of these arrangements within the SETA accounting authorities. Using a mixed methods research design, data was collected through interviews, analysing documents, and conducting a survey. The main finding was that board independence had been undermined. The structural legitimacy of the composition of SETA boards had been established to some degree through legislative provisions. However, there were calls for a more diverse membership-based upon skills, experience and background. From the perspective of institutional theory, the findings illustrated the presence of competing logics, with many board members of the view that they were there to represent the constituency that had nominated them, rather than act in the best interests of the SETA. The findings highlight the importance of making the right appointment of board members and inducting them effectively into their role.