Corporate Governance and Business Ethics Structural Failures for Kingdom Bank Africa Limited (KBAL) Botswana

Abstract

The thrust of this study is to investigate the corporate governance and business ethics structural failures for Kingdom Bank Africa Limited (KBAL) Botswana. The research reviewed various literature elaborating on the various causes of failure of corporate governance within KBAL. Both quantitative and qualitative methods manipulating both random and non random sampling methods were used to gather data in the form of questionnaire, telephone interviews of the  cross sectional sampling frame from KBAL’s top management to the banking clients. The triangulation methodology was employed for manipulating both probability and non-probability methods, research questions based on corporate governance report (Kings Report III – Raft principles), data collection techniques based on Descriptive statistics, and the electronic data analysis processing. The study revealed that majority of the respondents highlighted that they were no effective risk management policies set in place to provide proper guidelines against unethical conduct and insolvency. All efforts and stop gap measures by the shareholders to recapitalize the institution in order to comply with minimum capital requirements and maintain liquidity failed to yield positive results. Results also depict that the other reasons that contributed to the collapsing of the bank were non performing loans extended to top executives and serial debtors. The study also revealed that there was no full disclosure of remuneration and incentive schemes for key executives and middle management, with reference to the best practice corporate governance reports. The research of KBAL therefore revealed that there was no evidence of at least implementing the corporate governance framework best practices to safeguard the new shareholders and the general banking public. Lack of accountability and non-disclosure of financial information took its heavy and negative toll on KBAL, thereby disadvantaging the banking clients and staff. This study therefore recommends a further study on KBAL Enterprise Risk Management (ERM) policies, the role of external auditors in the collapse of the bank and its resultant effect on the banking confidence in Botswana.