Corporate governance in the cement manufacturing industry of Zambia (original) (raw)
Related papers
Corporate governance studies in Zimbabwe have concentrated on existence of frameworks that control firms. This study focused on the corporate governance factors that are associated with firm performance in the Zimbabwean manufacturing sector. We investigated a sample of 88 companies which were operating at least 80% capacity from 2009 to 2012.Using Return on investment (ROA) as a measure of performance and the dependent variable, and 14 corporate governance proxies encompassing board structure, board composition and board procedures as the independent variables, a bivariate and multivariate regression analysis was performed. The results indicated that shareholder concentration, proportion of independent directors, board tenure and access to financial statements are positive and significant to firm performance in the bivariate analysis. On the multivariate regression analysis however, independent directors was positive but not significant. Researchers have not been able to agree on these factors and since corporate governance is largely endogenously determined it can be concluded that factors are influenced by country effects. Thus further studies focusing on similar countries need to be undertaken.
International Journal of Innovative Research and Development, 2019
Businesses' success, whether micro, small, medium or large-scale depend on how best the resources are utilized by principal actors nay top management. Thus the coordination of principles, plans, strategies and actions to achieve organization effectiveness and efficiency that will allay conflicts of interests between Principal (Shareholders)) and Agents (Board of Directors/Top management) and between Principal (Shareholders) and Principal (Shareholders) in such a way that leads to increased organization's performance variables namely: Shareholders' maximization, Profitability and Sales growth is fundamental. Therefore, it is important to strike a balance of the benefits of organization's performance amongst company's top management, shareholders and other stakeholders. This research thus attempts to explore the significant relationship or otherwise of corporate governance mechanism: Board Size, Board Structure and CEO status on organization's performance. The organization's performance variables used in this study include only: Shareholders' wealth maximization (Return on Equity), Profit (Return on Investment) and sales growth. This Study employs multiple regression models in models via statistical packages for social sciences (SPSS 17.0) in analyzing the relationship between corporate governance and organizational performance variables. Analysis for variance (ANOVA) at 5% significance level is used to test for the overall significance of the parameters in the study. The secondary sources of data gathering are the major tools used for the purpose of this study. This study covers the annual consolidated reports on sales growth, profitability and shareholders wealth maximization for each relevant year activities of Cement Company of Northern Nigeria. The study covers a period of five (5) years activities of the company, from 2009-2013. The results show that there is a negative relationship between the Corporate Governance Mechanisms and Organization's performance indicators tested in this study. The board size, board structure and CEO status show p-value of 0.910, 0.923 and 0.410 respectively, which indicate that null hypothesis should be accepted because each of these levels of significance or p-value are greater than α = 5% = 0.05 level of significance in the critical table. The test for the overall significance equally reveals the same result as follows: F*= = 0.653 (0.696). The coefficient of determination R 2 = 0.662 (66%) indicates that approximately 66% variation in the Corporate Governance Mechanisms is explained by the variation in shareholders wealth maximization. This means that about 34 percent variation in Corporate Governance Mechanisms is explained by other factors not captured in this study. Moreover, the study equally indicates the following: F*= = 0.593 (0.715). Thus, the findings underscore the view of Hermalin et al (1991), John and Senbet (1998) whose hypotheses revealed that, there was no any relationship between board composition and organization performance.
2015
Corporate governance studies in Zimbabwe have concentrated on existence of frameworks that control firms. This study focused on the corporate governance factors that are associated with firm performance in the Zimbabwean manufacturing sector. We investigated a sample of 88 companies which were operating at least 80% capacity from 2009 to 2012.Using Return on Assetst (ROA) as a measure of performance and the dependent variable, and 14 corporate governance proxies encompassing board structure, board composition and board procedures as the independent variables, a bivariate and multivariate regression analysis was performed. The results indicated that shareholder concentration, proportion of independent directors, board tenure and access to financial statements are positive and significant to firm performance in the bivariate analysis. On the multivariate regression analysis however, independent directors was positive but not significant. Researchers have not been able to agree on these factors and since corporate governance is largely endogenously determined it can be concluded that factors are influenced by country effects. Thus further studies focusing on similar countries need to be undertaken.
Corporate Governance and Financial performance
The study sought to examine the effect of corporate governance on financial performance in the manufacturing sector, a case of Uganda Clays limited. The study objectives were; to examine the effect of corporate planning on financial performance in the manufacturing sectors, to determine the effect of corporate staff control on financial performance in the manufacturing sectors and to find the effect of corporate accountability on financial performance in the manufacturing sectors. The study was guided by theAgency Theory by Alchian and Demsetz (1972) and Business Ethic Theory by Haslinda and Benedict (2009). The research employed a cross-sectional survey design by adopting both qualitative and quantitative approaches. A sample of 76 from a population of 98 was considered for data collection using both primary and secondary data sources. From the study findings, the study showed that corporate accountability has beta values of 0.602 and significance of 0.001. This shows that in this study, corporate accountability has a high positive and significant effect on financial performance at 60.2% at the level of significance 0.001. Also, findings from table 4.19 above study showed that corporate staff control has beta values of 0.364 and significance of 0.065. This shows that in this study, corporate accountability has a second contribution with a positive and insignificant effect on financial performance at 36.4% at the level of significance 0.065. Furthermore, findings from table 4.19 above study showed that corporate planning has beta values of-0.126 and significance of 0.434. This shows that in this study, corporate planning has the least contribution with a negative and insignificant effect on financial performance at-12.6% at the level of significance 0.434. The study recommended that the corporate board of UCL need put more emphasis on ownership and responsibility for corporate planning process especially at corporate strategy level. It can be recommended that UCL's board makes corporate planning as one of their key deliverable outputs in the board's terms of reference so that its performance can be measured against this task at the end of every year. It can also be recommended that each board, during its term in office be trained on how to handle corporate planning for the cooperative society.
The main objective of this study was to establish the effect of corporate governance on financial performance of companies listed at Nairobi Securities Exchange. Specifically, the study examined the composition of board members, shareholders, board size and CEO (Chief Executive Officer) duality has an effect on financial performance of companies listed at the Nairobi Securities Exchange. The study population consisted of all the sixty-six companies that are listed at Nairobi Securities Exchange as at December 2016. The sample population was thirty-five companies listed at NSE. From the multivariate regression analysis, the study established that corporate governance practices such as board composition negatively and significantly affects the financial performance while board size and CEO duality has a positive effect on the financial performance while shareholding has a positive and insignificant effect financial performance of companies listed at the Nairobi Securities Exchange. The study established the existence of significant relationship between corporate governance and financial performance of companies listed at the Nairobi Securities Exchange. The study established that shareholding (ownership concentration) has insignificant effect on financial performance of companies. The study also established that CEO duality and board size positively influences the performance of companies. The study further established that board composition has a negative influence on the financial performance of companies. The study recommends the companies to ensure there is a good balance between the non-executive members and executive members in their boards to ensure the level of their autonomy is high. Further, the study recommends that the chief executive officers especially in a case where the owner doubles up as a chairperson and as a CEO to continue serving in various roles in a company. The study further recommends companies to encourage large shareholders to invest more as they have tendency for monitoring, controlling and ratifying roles in the company. This can improve the performance of the company especially when some of the shareholders are managers.
2017
This study investigated corporate governance and organizational performance with emphases on the Nigerian manufacturing industry. The survey research design was used for the study and data collected were mainly from secondary sources. Ordinary least square regression technique was used in analyzing the data. Based on the empirical results, the study revealed that Board size, Board composition and audit committee size have significant effect on return on capital employed. Conclusively, recent global incidences of corporate failures have heralded the consciousness for the adoption of good corporate governance for sustained firm value. Therefore, it is expedient for manufacturing companies to comply with corporate governance codes of best practices structured to enhance accountability, transparency, integrity, equity, fairness and efficiency in organizational management. A functional board as well as other board sub committees should be constituted to allow for brainstorming on board m...
Purpose-This paper seeks to examine the relationship between corporate governance and firm performance of listed Ghanaian companies. Design/Methodology/approach-The study adopts a longitudinal and cross-sectional data set of 20 sampled companies over a period of 5 years. The data was analysed using a panel regression and ANOVA analysis to establish the relationship between corporate governance and firm performance. Corporate governance is defined in terms of three indices-board structure, ownership structure and corporate control while firm performance is measured by return on assets, return on equity, net profit margin and Tobin's Q. Findings-The findings of the study revealed that, top twenty ownership structures and female representation on board have significant positive relationship with firm performance, while board independence and frequency of audit committee meeting have negative significant relationship with firm performance. Research limitations/implications-The scope of this study can be expanded to include non-listed firms. In addition, other corporate governance mechanisms could be considered to broaden the scope of the study. Originality/value-The originality of the paper is attributable to the use of two (2) data analysis techniques (panel regression analysis and ANOVA) which provides a comprehensive analysis on the relationship between corporate governance and firm performance. This, to the best knowledge of the authors, is the first of its kind to be done in Ghana.
EFFECT OF CORPORATE GOVERNANCE ON THE FINANCIAL PERFOR
In recent times, interest in corporate governance in the African continent has assumed highest propositions. This is probably due to the great push from the developing countries to the African countries to embrace good governance in order to attract foreign investors and to improve shareholders value. The role of effective corporate governance mechanisms as key components of prudent financial management has become an issue of global significance and has received new urgency due to various corporate scandals and failure. This study seeks to examine the impact of corporate governance mechanisms (audit committee size, board gender diversity and board size) on financial performance based on the annual reports of listed parastatals at the Nairobi Securities exchange The General objective of the study is to investigate the effect of corporate governance on the financial performance of parastatals listed in the Nairobi stock Exchange whereas the specific objectives are to find out the effects of board size, audit committee size and board gender diversity on the financial performance of parastatals listed in NSE, to establish the effect of board composition on financial performance of parastatals listed in NSE and to establish the effect of sustainable responsible business on the financial performance of parastatals listed in the NSE. This study will utilize four main theories i.e. shareholder's model, agency theory, management theory, stakeholders theory and stewardship theory. The study will use longitudinal research design with the target population being parastatals listed in the Nairobi stock exchange since the year 2004 after the automation of the systems in the stock market. Secondary Data will be collected from the capital markets authority library. Data collected will be analysed using SPSS for multiple regression analysis. Findings from the study will be interpreted for the extent of relationship among the variables.
European Scientific Journal, 2013
The focus of this study was on linking these variables to the contrasting and competing theories of Corporate Governance such as Agency Theory, Stewardship Theory, and Resource Dependence Theory, among others. The role of the Board as a corporate governance tool is widely acknowledged in much of the literature on Corporate Governance. Scholars and practitioners have sought to understand the relationship between various board composition variables and some measure of performance as a means of establishing what the significant board composition variables are and the likely effect of adding or dropping some of these variables in the process of establishing effective boards. This study investigated significance of the board composition variables of size of the board, proportion of outside directors, proportion of inside directors, and the role of CEO duality on firm performance. This study found that the overall regression models for firm performance for both the Return on Assets and Tobin Q ratio are significant. This means that the board composition variables cited above are important predictors of firm performance. The study also found that the significance of the individual variables in the overall specification models have differing significant variables on the basis of the measure of performance selected for the firm. For example, when firm performance is measured by the Return on Assets, the significant variable in the model is the size of the board. Under the Tobin Q ratio firm performance measure, on the other hand, proportion of outside directors is the significant variable. These