The Effect of Corporate Governance on Company Gerformance. Case of Zimbabwe Telecommunications Industry.

Abstract

The study sought to examine the impact of corporate governance on company performance within the telecommunications industry in Zimbabwe. The study also sought to assess the effect of CEO duality on company performance in the Zimbabwean telecommunications industry, to evaluate the influence of board independence on company performance in the Zimbabwean telecommunications industry and to establish the impact of executive compensation on company performance in the Zimbabwean telecommunications industry. A sample size of 106 respondents was used for this study. Quantitative research method was used for this study. The research employed the probability cluster sampling methodologies. 106 questionnaires and only 92 were successfully completed and returned. A descriptive research design was used. Data analysis was done using descriptive tests using SPSS 27 (2021). Data was also entered into the SPSS for descriptive analysis and hypothesis testing. The researcher used the SPSS 27 (2021) software to conduct statistical analysis of the data that was presented. Reliability tests, correlation, hypothesis testing and structural equation modelling was all carried out using the tool. The study concluded that all three aspects of corporate governance - CEO duality, board independence, and executive compensation - positively impact company performance in the Zimbabwean telecommunications industry. The methodology utilized questionnaires and a literature review to address the research questions, though limitations included reliance on primary data only and restrictions on data availability. The main recommendations were that Zimbabwean telecom firms should recognize how corporate governance mechanisms like CEO duality, board independence, and performance-linked compensation can positively impact performance according to the findings, and develop policies accordingly. Companies were advised to evaluate executive compensation structures and whether they properly motivate and align with goals, consider separating CEO/chair roles or introducing independent board leadership where duality exists, and boost independence on boards with lower levels. Additionally, firms should regularly benchmark governance approaches, conduct more granular analysis of impacts on specific performance dimensions, and address uncertainties through additional manager engagement to design tailored reforms. Overall, the recommendations centered on leveraging the study's findings to strengthen governance practices and their ability to enhance organizational outcomes over the long-run.