Abstract
M.Ing. (Engineering Management)
In the wake of the recent global financial crisis, the engineering and building construction industry has been faced with great uncertainty. Emerging from the crisis, investors are taking a cautious approach to how, with, and through whom they invest money. Organisation’s shareholders and stakeholders are therefore seeking new ways to run their businesses looking at cost optimisation and enhanced performance to increase their profitability. Companies are moving towards ensuring tighter control through stronger governance, closer risk management and compliance to statutory and regulatory requirements. To achieve this, assurance frameworks are being used to test, monitor and report to senior management on the organisation’s status.
This dissertation highlights the importance of governance, risk and compliance control mechanisms specifically in the building construction sector within construction companies in South Africa. It will assess the maturity of such assurance frameworks and its implementation on building construction projects undertaken by large construction companies. These practices will be compared to the assurance frameworks as recommended and implemented by international leading practice. The dissertation will review the impacts that effective and weak assurance practices have on an organisation’s projects, their businesses and their statutory liability.
To understand this, the research conducted interviews, surveys and case studies on large Johannesburg Stock Exchange (JSE) listed construction companies in South Africa. The data was analysed: quantitatively, qualitatively, statistically as well as trended conclusions are made.
The dissertation ends by pointing to the advantages of proper assurance controls on building construction projects and presents a template of an assurance framework that may be developed by construction companies into assurance programmes and other tools for use in their environment.