Effects of corporate governance practices on financial performance of state-owned enterprises in Zambia

This article explores the relationship between corporate governance and financial performance in Zambian State-Owned Enterprises (SOEs) under the Industrial Development Corporation (IDC). Governance in SOEs has gained renewed focus globally, as these entities are essential to public service delivery and national development. Despite this, many SOEs in sub-Saharan Africa struggle with inefficiency, underperformance, and weak accountability frameworks. Using a positivist, quantitative design, this study surveyed 24 IDC-managed SOEs to evaluate the impact of four governance dimensions: board and general assembly practices, internal controls, transparency and disclosure, and commitment to corporate governance. Financial performance was measured using Profit After Tax (PAT) growth. Descriptive and inferential statistics were conducted using SPSS version 30. Findings indicated that while governance structures are in place, their effectiveness in driving financial performance remains limited. No statistically significant correlation was found between governance indicators and PAT growth (p > 0.05), although 24.6% of performance variation was attributable to governance. These findings highlight context-specific barriers such as political interference, resource constraints, and fragmented oversight. The paper concludes with recommendations for strengthening governance frameworks, aligning oversight mechanisms, and ensuring institutional independence.