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The concept of governance is not new. It is as old as human civilization. Simply put governance means the process of decision making and the process by which decision are being implemented, United Nations economic and social commission for Asia and the Pacific (). Central bank (2004) defines corporate governance as referring to the procedures and processes according to which an organization is directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organization such as the board, managers, shareholders and other stakeholders and lays down the rules and procedures for decision making. The research identifies with the above definition of corporate governance as a tool used to channel STEs to meet their ends through proper management of means of doing so.
According to the government of the Slovenia report (2009) the state has its own set aside functions in relation to parastatals varying from ownership, regulator, portfolio investor, guardian of competition, the guarantor of public services, the promoter of the development, the guardian of the environment, the grantor of concessions. This means that each role of the state should be separated from the other if proper management is to be upheld. The role of the state as the owner of the enterprise needs to be separated from the role of the state as the market regulator or the role of the state as the sector guardian for the development of individual industry sectors.