An evaluation of the impact on performance of corporate governance practices in the mobile telecommunications industry in Zimbabwe

Abstract

This research surveys the impact of corporate governance practices on performance in the highly profitable mobile telecommunications industry in Zimbabwe, with special emphasis on return on assets as a proxy for performance. It further sought to evaluate the extent to which corporate governance practices are being observed as well as assess whether performances of the different telecoms companies are comparable and identify factors affecting compliance to corporate governance

A descriptive survey research design was used to find the opinions of individuals in the target population on factors affecting compliance with corporate governance and the extent to which firms observe corporate governance. The average Return on Assets (ROA) was calculated and used as a proxy for performance for the period under study to assess performance of the three companies. Data entry was done using a combination of Microsoft Excel and the STATA statistical package.

Almost all of the investigated mobile telecommunications companies largely observe corporate governance practices of the rights of shareholders, the equitable treatment of shareholders, the role of stakeholders in corporate governance, disclosure and transparency and the responsibility of the board. However, NetOne’s results show that a bigger percentage of performance in the state enterprise is explained by other factors other than corporate governance practices tested unlike in the other two private companies where the relationship is more significant. The research was done within a short space of time and due to the sensitivity of some of the variables, most of the target population could not provide such data because of confidentiality. It is evident that corporate governance impacts on performance and hence the government should promote good corporate governance standards. The study proposes further study in the areas of corporate governance and corporate failure as this study has established some discrepancies in performance between the state-controlled mobile telecommunications companies and the privately owned companies