Methods to Promote Improved Governance in Maritime Administrations of Developing Nations

Abstract

Shipping has for a long time been acknowledged as one of the strong catalysts of socio-economic development. The facilitation of international trade is one of the central aims of the shipping industry and has become an increasingly important part of a global economy. The concept “governance” has become the topic of much debate within the context of international trade and was also recently highlighted due to the fact that shipping is trans-boundary and that the shipping industry has an impact on the environment. At the same time, it has rightly been observed that there is no uniform definition of the concept “governance”, and definitions that do exist, only point to an uncertainty of the concept (Roe 2012). It is noteworthy that the term “governance” is used extensively in a number of academic disciplines, e.g. business administration, political science, management, economics and law (Yliskylä-Peuralahti and Gritsenko 2014). As such, the term “governance” is mainly defined on the basis of the focus of each individual discipline. For example, in the field of economics, governance is said to comprise of the processes that support economic actions and transactions by protecting property rights, enforcing contracts and taking collective action to provide appropriate physical and organisational infrastructure (Dixit 2008). In economic governance, the aforementioned processes are carried out within institutions, both formal and informal (Dixit 2008). The definition of governance as observed in the economic-discipline can be contrasted from the way it is understood in the field of law. Governance, in the law discipline, is concerned inter alia, with the functions of the government organs, i.e. the executive branch, the legislative branch and the judiciary branch. To ensure good governance, it is acknowledged that each of these three organs should be separate and be given independent powers so that powers, and roles and responsibilities are not in conflict with each other (Vile 1967). Again, in the field of business administration, the definition of the term “governance” is mainly company or corporation oriented whereby the fundamental principle is similar to that of the economic discipline. Fidrmuc et al. (2006) have offered an insightful definition of corporate governance that refers to a “combination of mechanisms which ensure that the management (the agent) runs the firm for the benefit of one or several stakeholders (principals)” (Fidrmuc et al. 2006). In short, governance in the corporate field revolves mainly around the conflict of interests and the prevention or mitigation of those conflicts between the providers of finance and the managers; the shareholders and the stakeholders; and the different types of shareholders (Goergen et al. 2012).