Board index insights and performance of municipal-owned entities

This study develops and applies a board index (BINDEX) to assess governance quality in municipal-owned entities (MOEs) of Johannesburg and examines how governance patterns relate to financial performance over time. This study adopts a mixed-methods approach, combining structured documentary analysis of integrated reports with the construction of a composite governance index derived from governance indicators, including gender representation, chair workload, board size, age composition, and chief executive officer (CEO) duality. Forty entity-year observations were analysed and compared with financial measures including profit, return on capital employed (ROCE), and the debt-equity (D/E) ratio. The findings indicate descriptive patterns of co-movement between governance indicators and financial metrics, where entities with more stable or improving governance characteristics often coincide with stronger profitability, healthier ROCE, and lower leverage; however, no causal or statistically validated relationship is inferred (de Villiers & Dimes, 2021; Tremml et al., 2022). The study offers a practical diagnostic tool for identifying governance patterns, without asserting causal relationships between governance and performance. By providing a transparent, replicable, and context-sensitive governance measure, the study contributes to organisational-level governance assessment beyond traditional compliance-based approaches.