University of Vaasa - Vaasan yliopisto

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and corporate governance. The word "governance" is mostly used in the context of
political governance, however, it is fair to say that its tenets are no different from the
four fundamental pillars of corporate governance, (fairness, accountability,
transparency and responsibility) and it is these pillars that are essential to any sound
democratic strategy that aims at bringing about meaningful development.
Furthermore, it is important to note that there is an inter-relation between political,
economic and corporate governance issues and this can be extended to include
sustainable development because it is impossible to develop an economy without
first putting in place institutions that strengthen good political, social and economic
governance. The truth of the matter is that achieving sustainable development
requires concerted efforts through broad based partnerships between all economic
actors from both the public and private sectors. To that effect, it is unquestionably
true that corporate governance does offer viable options to solving some of the
development problems that poor countries like Zambia face through the
institutionalising of its four basic principles. However, the problem is that in as much
as corporate governance has been gaining popularity in research, much of it is
restricted to the financial sectors of the industrialised countries and there are not
many studies that have focused on investigating its relationship with sustainable
development, particularly in the African context. Therefore, it is imperative to carry
out this study to ultimately contribute to to the body of literature that focuses on
investigating how specifically, corporations (both SOEs and private) as key
economic actors can contribute to the sustainability of the economies in which they
are embedded.
Currently, the global economy is in turmoil. Some have argued that if market risk
and its cyclical movements were the only causes of the collapse of the US mortgage
market and other corporate failures that led to the initial global financial meltdown,
there probably wouldn't have been such widespread public scorn for corporate greed,
and anyway, the markets provide other instruments for investors to diversify their
investments into, that would have led to the markets correcting themselves. In the
same way, some can also argue that to the extent that the markets' fall, in Zambia's
case poor economic management; the resultant abject poverty for the majority can be
traced to corruption scandals and breaches of trust; public support for corporations
evaporates, the market becomes dysfunctional and the broader economy embarks on
a downhill spiral that is difficult to correct. As a knock on effect therefore, the state’s
role as a major economic player becomes questionable, which underscores a
widespread public and hence political interest in reinforcing corporate governance
practices as tools for broader economic development. Such concerns inevitably
become even more important in an international context where the full benefits of
free capital flows can only be realised if there is a mutual understanding on the basic
elements of good corporate governance. Case in point; the freezing of aid from
Norway and Netherlands (as pointed out earlier) to Zambia's Ministry of Health. The
consequences were a nationwide strike by doctors and nurses which paralysed the
health system in the country for days because government refused to improve their
working conditions due to lack of funds while a few individuals were looting the
same funds intended for such purposes.