University of Vaasa - Vaasan yliopisto

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The empirical part will be formed around comparative case studies of corporate
governance practices in state-owned enterprises (SOE) and listed companies whose
shares are publicly traded on the stock exchanges in Finland and Zambia.
Corporate governance has mainly been studied from the perspectives of accounting
and finance as corporate control mechanisms that regulate the relationships between
shareholders, board members and managers in their pursuit for profits.
The idea of this study however is to depart from that common route and move
towards exploring how institutionalising and incorporating the corporate governance
principles into the overall operational or strategic structures of state-owned and
public companies can positively influence the advancement of the broader
development programmes of an economy. Case studies in selected enterprises will
provide comparative perspectives on how Finnish companies have used the CG
concept as a tool for institutionalising best practices and later on contribute to
sustainable economic development.
By choosing to benchmark Zambia's corporate governance principles against those of
Finland, I am not in any way suggesting that Finland is good while Zambia is evil,
but Iam convinced that there are learning opportunities in such a rare study. For
example, if we take corruption, which is undeniably one of the detriments to
development in countries like Zambia, until 2008 Finland has enjoyed a shared first
position as the least corrupt country in the world according to Transparency
International's corruption perception index. Currently Finland is 5 th while Zambia
lies 115 th on the same index. Finland’s fall has been as a result of a few cases, first in
and between private companies and more recently in and between state-owned
companies. (see:
http://www.transparency.org/news_room/in_focus/2008/cpi2008/cpi_2008_table).
However, as a result of effective laws and the independence of various institutions
that contribute to good governance, Finland has been able to effectively eliminate
elements that otherwise undermine the process of institutionalising good governance
principles in all sectors of the economy. It is for this reason that I firmly believe that
results from this comparative study will provide learning opportunities for Zambia as
far as institutionalising good governance in all sectors of the economy is concerned.
Going through literature, it is clear that this kind of comparative study has never been
done before in the context of countries that are so diferent from each other both
culturaly, economicaly, politically and socially. However, every country has a
"sustainable development" agenda, therefore, I firmly believe that there is a great
deal to learn from this kind of comparative experiences in both policy and
implementation approaches. Literature shows that despite specific local historical,
economic and political conditions, reform leaders make choices on strategy and
policy mechanisms, and their mistakes could have dramatic consequences on the
long-term results of the reforms. This sugests that managers and reformists are faced
with similar situations where critical decisions have to be made, therefore,
comparative experiences provide an unprarreled resource for learning from how
other countries have succeeded or failed on similar subjects.
Since adopting and implementing good corporate governance systems requires a
certain measure of institutional reform, some may argue that the levels of both