Effectiveness of board of directors’ composition on performance of government parastatals: A case of parastatal institutions in Tanzania

Abstract

performance of government Parastatals in Tanzania. In particular, the study aimed at examining the relationship between board members’ expertise and the performance of government Parastatals in Tanzania; to find out the relationship between size of the board and the performance of government Parastatals in Tanzania; to explore the relationship between board members’ experience and the performance of government Parastatals; and to examine the relationship between board members’ age and the performance of government Parastatals in Tanzania. The study used a mix of both qualitative and quantitative research techniques, whereby a total of10 government Parastatals and 50 board members were investigated. The data was collected from primary sources and analysed qualitatively and quantitatively The central purpose of the study was to assess the effectiveness of board of directors’ composition in, mainly by using descriptive and inferential statistics. The findings revealed that board members’ experience and age of the board members are significant for the performance of government Parastatals in Tanzania. This was proved by their lower probabilities than the significance level that was used in the estimation. The study also found that the challenges that face the board of directors in steering the performance of government Parastatals includes financial issues, insider director’s failure to implement proper policy functions, lack of extreme nationalism and patriotism among public servants and political interventions in the implementations of government Parastatals. The study has concluded that, composition of board of directors plays significant roles on the performances of government Parastatals. Therefore, the study recommends that, the board members’ selection should draw from insider and outsider members, specific tenure of services, better education background and gender inclusiveness. These premises will ensure significant contributions to the steering of performance of government Parastatals.