Corporate governance practices of the Solomon Islands state-owned enterprises and the wantok system influence

Corporate governance practices of the Solomon Islands state-owned enterprises and the wantok system influence

Corporate governance practices of the Solomon Islands State-Owned Enterprises may continue to face challenges unless the wantok system influences are addressed strategically and culturally. The wantok system is a culture that is prevalent in the Solomon Islands which requires a network of cooperation, caring and reciprocal support. It is perceived as a constraining factor in socio-economic and political development in the Solomon Islands. While prior research identified the wantok system as a cultural constraint to development, this study explores how strategies may be implemented to enhance the acceptance of the corporate governance practices of the Solomon Islands’ SOEs through understanding the influence of the wantok system. The study, therefore, investigates the extent to which the wantok system influences corporate governance practices and identifies the wantok system obligation that has the greatest influence on the corporate governance practices of the Solomon Islands State-Owned Enterprises (SOEs). In addition, the study identifies the strategies to strengthen the corporate governance system and the strategies to reorientate the wantok system to enhance corporate governance practices of the Solomon Islands SOEs. Stamkou et al.’s (2019) multilevel theoretical model of collectivism and tightness guided this qualitative study. Thematic analysis was applied to data gathered from semi-structured interviews and a questionnaire. A comparative interpretation was applied to the findings gathered from two participant groups: those employed in SOEs and those employed in non-state-owned enterprises (NSOEs). SOE participants were senior employees and included board members, CEOs and senior management staff. NSOE participants included senior government officers, a professional accountant, a private entrepreneur, academic staff, and the CEO and directors of civil society groups. A total of 32 participants were interviewed through 26 individual interviews and three focus groups of two participants each per group. The two participant groups differed in their views regarding the extent of the wantok system’s influences on corporate governance practices. SOE employees viewed the influences as limited, while NSOEs believed the influences were moderate to extensive. The findings identify the common principle of mutual reciprocity as the wantok system obligation that has the greatest influence on corporate governance practices in the Solomon Islands SOEs. The study recommends strengthening SOE oversight roles and enhancing corporate governance mechanisms as strategies to strengthen the corporate governance system of the Solomon Islands SOEs. Furthermore, enhancing corporate governance should occur through an understanding of the authentic wantok system, incorporating wantok system guidelines as a co-support system, and promoting the wantok system collective welfare and social harmony values together with corporate governance principles. This study contributes to expanding the research on corporate governance practices as proposed by Brennan and Solomon (2008) and Stamkou et al. (2019) by employing a multilevel theoretical framework of collectivism and tightness, horizontal and vertical collectivism and Hofstede’s cultural dimensions. The findings are achieved through qualitative research focusing on the government sector, and examining the influence of culture in developing countries. The findings of the study will contribute to an understanding of wantok system influences and to re-orientating the wantok system to support corporate governance. The study will be useful, not only for the Solomon Islands’ SOEs, but also other organisations where the wantok system has significant influence. Additionally, other developing countries with similar cultural backgrounds may benefit from the study’s insights and recommendations.

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