Corporate governance in the cement manufacturing industry of Zambia

Abstract

The article examined corporate governance's effects on the performance of cement-producing companies in Zambia. Assessing the performance of one of the manufacturing segments of the manufacturing industry because of the effects of corporate governance was detrimental to findings on why there is limited growth in the industry. The study specifically assessed the effects of board size, board independence, CEO duality, multiple directorships, and board tenure on the company's performance. A deductive approach strategy was used, which focused on four leading cement-producing companies in Zambia: Lafarge, Dangote, Sinoma, and Zambezi Portland. A sample population of 150 participants was targeted. Questionnaires collected primary and secondary data from the company’s audited reports. This study used the principal components analysis, correlation, and regression analysis using SPSS version 27. The study found and concluded a positive correlation and effect between multiple directorships and board independence on the company's performance. CEO duality positively impacted the company's performance, but it was not statistically significant. On the other hand, it was concluded and found that board tenure and board size had a negative effect on the company's performance. This implied that they had a reducing impact on the performance of the companies in the cement manufacturing industry. Cement companies should tailor the size of their boards to meet their unique requirements, even though board size and tenure have a negative and statistically significant effect on performance.