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CHAPTER 5.

The objective of the study was to find out if corporate governance has an effect on the

performance of the company. Corporate governance is broken down to pillars, structures,

practices and principles were analyzes and their contribution to better performance illustrated. I

was established that the size of the board is sufficient as per the requirements of the businesses.

All companies are required to maintain a certain number of the board members as a regulatory

mechanism for the firms.

The findings of this study show that corporate governance has a positive but significant

effect on the performance of the companies. The practices carried out by the workforce have a

positive impact on the satisfaction of the customer which leads to the firm expanding their reach.

In addition to this, the practices improve the financial performance of the company. The pillars

of the company have a vast contribution on learning and growth of the business compared to

other measurement perspectives.

This study focused on the consequence of Corporate Governance on companies. The

results of this study therefore have more than a few contributions to the existing understanding of

corporate governance. First, the study indicates that nowadays, a blend of Corporate Governance

Structures, Corporate Governance Principles and Corporate governance pillars lead to a positive

effect on performance.

The study reveals that the combination of the corporate governance pillars and principles

lead to a positive and significant connection with the performance of the enterprise. The study

examined the relationship existing between corporate governance and the performance of the

organizations from different perspectives namely; effective asset management, better decision
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making and better competitive advantage. It was discovered that the adoption of good corporate

governance enhances transparency of the company’s day to day operations.

Furthermore, corporate governance protects the interests of the shareholders with that of

the managers. Factors such as the board size, age and meetings all contribute to good

performance of the company in question. Since the financial and the annual reports are the only

means of communication between the shareholders and the company, it vital for the statements

to show the true position of the company’s performance.

With good corporate governance, a company is able to generate more resources to create

more employment opportunities for the general public. Furthermore, good governance is

essential in aiding the business support other firms through the payments dividends to the

shareholders and generates more tax revenue for the government.

Given the importance of strategic management for organizational performance, it is

paramount for the necessary studies are conducted as well as the number of the board members.

This move draws the attention to the fact that the director’s role is not only to be a monitoring

mechanism for other employees but also offer expertise and advice to the fellow workers in the

firm. In addition to this, they should also offer linkages with other external sources where the

employees would enhance their effectiveness while carrying out their daily duties.

Therefore, if companies want to boost their performance, endure in international market,

become more cutthroat, attract investors, clientele, be more profitable and raise resources at

lower price, they must put into operation corporate governance values and standards in their

approach and decision making process.

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The main objective of this study was to ascertain if corporate governance has an effect on

organizational performance of a company. It shows a weak positive association between

corporate governance and performance of a firm. It is consequently suggested that companies

work towards intensification of their corporate governance, pillars, structures, principles and

practices. They should guarantee clear definition of the practices; the employees in the

institutions should own these practices and ensure that the same is replicated in their operations.

Clear guiding principles need to be provided to ensure execution of these practices is

effortless and can be practiced with minimal challenges. Corporate governance principles require

precision on their roles and ensure the duties and tasks are efficiently executed. The pillars and

the principles should be well adhered to ensure conformity to corporate governance.

In addition to this, it is incumbent upon the directors to protect the interests of the owners

with consideration of the other stakeholders. The board of directors is responsible for the

management of the firm to ensure value creation of the company is met. It is the responsibility of

the board to lay down the goals of the firm and ensure the materials necessary for the

implementation are present. The materials often include the financial resources and a competent

workforce. These resources ensure the activities of the company are organized appropriately.

In order to meet the targets of the company, the board of directors is required to employ a

competent executive board and lay down the division and responsibilities between the two

boards. The tasks of each board are clearly outlined and the employment relationship of the

executive board is also explained. The board of directors supervises the executive board and

provides them with the guidelines of supervision. Moreover, the board of directors is responsible

on ensuring the development, dismissal and retention of the workers.

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The chairman of the board is responsible for the organization of the firm so as to ensure

efficiency of the team in creating the best possible working environment. This ensures the staff

members are equipped with the knowledge and skills useful necessary to fulfill the objectives of

the company. However, in order for the board to meet its obligation, the chairman requires

constant update of data to the members on a regular basis. The information presented expands

the stakeholder’s knowledge on the relevant matters of the company.

Moreover, if the board of directors, in exceptional occasions, asks the chairman of the

board of directors to execute special operating actions for the company, including briefly

involving in the daily management, a board decree to that effect is approved to ensure that the

board of directors maintains its sovereignty and control the functions of the company.

Resolutions on the chairman’s input in day-to-day supervision and the expected duration hereof

should be available in a company statement.

Like all studies, the present research has its shortcomings especially considering the

methodology used. The use of questionnaires to collect data is disadvantageous since the

responses could be biased brought by the common method of collection. Although extensive care

has been taken to prepare the pilot of the questionnaire, much criticism is projected towards the

survey method and this cannot be completely ignored. Measuring the research questions solely

based on the opinion of the respondents provides a generalization view of the findings. The data

offered often lacks reference as they are just opinions.

As a result, the study failed to investigate other governance activities due to data

constraints. Thus essential information regarding the insider ownership, disclosure, capital

structure among others could not be included. Furthermore, the performance of the company is
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influenced by various factors other than just good governance. The legal, social, political and the

economical environment are essential in the growth of any company.

I therefore suggest that the future reports to consider these factors in exploring the effect

of good governance on the performance of the firm. However, the named data constraints does

not invalidate the data collected but rather shape the way for any future concept of related topic.

REFERENCE.

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and extension. Corporate Governance: An International Review, (3). 274.

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Solarino, A. M. (2017). Methodological rigor of corporate governance studies: A review and

recommendations for future studies. Corporate Governance: An International Review,

(6). 384. doi:10.1111/corg.12208.

Cuomo F. Mallin C. & Zattoni A. (2016). Corporate governance codes: a review and research

agenda. Corporate Governance: An International Review, (3). 222.

doi:10.1111/corg.12148.

Upcoming Compliance and Governance Events. (2013). Compliance Week, 10(112), 68-69.

O'Brien, J. (2016). Corporate Business Responsibility. Abingdon, Oxon: Routledge.