Enhancing finance transformation through governance, compliance and control mechanisms in Zimbabwe private sector companies

Abstract

The aim of this study was to determine ways of enhancing finance transformation through governance, compliance, and control mechanisms in Zimbabwean private sector companies. A quantitative survey was carried out in private sector companies in Harare, Bulawayo, Masvingo and Zvishavane. A sample of 150 managers in the private sector was targeted and a response rate of 60% was achieved. The findings revealed that governance, compliance, and control mechanisms had a positive and significant relationship with finance transformations.Although there is a positive association between governance and finance transformation, the study concluded that governance in private companies is a weak predictor of financial transformation. More so, although private companies ensure compliance by ensuring transparent financial reporting and compliance to legislation, compliance in private sector companies have been proved to be a weak predictor of finance transformation. Control mechanisms were found to be strong predictors of finance transformation. While private companies have good governance and compliance practices, they must focus more on strengthening control mechanisms through for example investing in automated control systems and documentation of control systems to enhance finance transformation. The research recommend that the government must come up with well thought policies that strengthen both internal and external controls in both public and private sector companies in a bid to promote their survival through reduction of business cost associated with fraud and corruption.Further studies were recommended to examine the effects of other factors affecting finance transformation apart from governance, compliance, and control in the same or different institutions/organisations.