CORPORATE GOVERNANCE AND ITS IMPACT ON THE MANAGEMENT OF MTN MOBILE COMMUNICATION NIGERIA LTD. KADUNA MAIN BRANCH
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CORPORATE GOVERNANCE AND ITS
IMPACT ON THE MANAGEMENT OF MTN MOBILE COMMUNICATION NIGERIA LTD. KADUNA MAIN BRANCH
ABSTRACT
This study examined the corporate governance and
its impact on the management of MTN Mobile Communication Nigeria Limited Kaduna main branch.
Research questions guided the study. A survey method was used for this study.
The population consisted of all the management staff of MTN Mobile
Communication Plc Kaduna
with a total population of twenty five (25) persons. The entire 25 person were
selected for the study. A questionnaire developed by the researcher based on
liker 5 point scale was used for the study.
Mean scores and frequencies were used to analyze the data based on the
research questions. Research results shows that internal and external mechanism
of corporate governance are used to regulate the performance of MTN. The
control mechanism put in place by MTN include internal and external auditing as
well as board of director monitoring and balance of power. The systemic
problems militating against corporate governance include high cost of
monitoring, inadequate supply of accounting information to shareholders.
TABLE OF CONTENTS
Title page i
Declaration ii
Approval Page iii
Dedication iv
Acknowledgment v
Abstract vi
Table of
Contents vii
CHAPTER ONE: INTRODUCTION
1.1
Background of the Study 1
1.2
Statement of the Problem 3
1.3
Objective of the Study 4
1.4
Significance of the Study 5
1.5
Research Questions 5
1.6
Scope of the Study 6
1.7
Definition of Terms 6
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction 8
2.1 The Concept of Corporate Governance 8
2.2 Principles
of Corporate Governance 10
2.3 The
Impact of Corporate Governance on the Performance of Corporate Organizations 12
2.4 Internal
and External Corporate governance control mechanism 15
2.5 The Systemic Problems of Corporate
Governance 18
2.6 Corporate Governance Models around the World 19
2.7 Regulation in Corporate Governance 22
2.8 Parties to Corporate Governance 25
2.9 Summary of the Literature Review 31
CHAPTER THREE: METHODOLOGY
3.1 Introduction 32
3.2 Research Design 32
3.3 Area of Study 32
3.4 Population of the Study 32
3.5 Sample Size and Sampling Technique 33
3.6 Instrument of Data Collection 33
3.7 Validation of the Instrument 33
3.8 Reliability of Instrument 34
3.9 Method of Data Collection 34
3.10 Method of Data Analysis 34
CHAPTER FOUR: DATA PRESENTATION
AND ANALYSIS
4.1 Introduction 36
4.2 Characteristics of Respondents 36
4.3 Data Analysis 37
4.4 Summary of Findings 43
4.5 Discussion of Findings 44
CHAPTER FIVE:
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.0 Introduction 46
5.1 Summary 46
5.2 Conclusion 47
5.3 Recommendations 48
References 50
Appendix 52
CHAPTER ONE
INTRODUCTION
1.1
Background
of the Study
Corporate
Governance is a number of process, customers, policies, laws and institutions
which impacts on the way a company is controlled. An important theme of
corporate governance is the nature and extent of accountability of people in
the business and mechanisms that try to decrease the principal agent problem
(Wikipedia, 2011).
Corporate
Governance also includes the relationships among the many stakeholders involved
and the goals for which the corporation is governed. In contemporary business
corporations, the main external stakeholder groups are shareholders, debt
holders, trade creditors, suppliers, customer and communities affected by the
corporation’s activities. Informal stakeholders are the board of directors,
executives and other employees. It guarantees that an enterprise is directed
and controlled in a responsible, professional, and transparent manner with the
purpose of safeguarding its long-tem success it is intended to increase the
confidence of shareholders and capital market investors.
The
World Bank (2009) states that corporate governance comprises two mechanisms,
internal and external corporate governance. Internal corporate governance,
giving priority to shareholder’s interest, operated on the board of directors
to monitor top management. On the other hand, external corporate governance
monitors and controls manager’s behaviors by means of external regulations and
force, in which many parties, such as suppliers, debtors (stakeholders),
accountants, lawyers, and providers of credit and investment bank.
In
the past, so many corporate organizations have been caught of getting involved
in unethical practices, for example the discovery of financial scam by the
Central Bank of Nigeria after the consolidation exercise, involving seven top
bank executives in Nigeria, which puts the credibility of their corporate image
under suspicion, which further shocking investors confidence. Consequently,
corporate governance mechanism has been a crucial issue discussed again.
It
is against this background that the researcher see the subject matter;
corporate governance and its impact on the management of MTN Mobile
Communication Limited, Kaduna
main branch as an issue worthy of being investigated.
1.2
Statement
of Problem
In
the past, so many organizations in Nigeria have been involved in
unethical practices, which puts the credibility of their corporate image doubt.
As such MTN Mobile Communications just like other telecommunication company
have been constraint with issues arising form customer’s complaint of high
tariffs, exploitations of workers by using contract staff as against direct
engagement of workers that would be remunerated according to their condition of
service. Previous researches into the subject has brought to light the poor
governance of so many companies with indebted accounts in Nigeria economy. Their accounting
systems did not reflect the companies financial status. A typical example is
the financial scam of Oceanic and Intercontinental Bank after the
consolidation. Most management of such outfits were not accountable to
stakeholders of the companies. Besides, the counts and the regulatory agencies
were short of authority, corruption and kickbacks were part of the system in
the companies. The poor governance practices led to the collapse of so many
companies in Nigeria.
Hence the need to study corporate governance and its impact on the management
of MTN Mobile Communication Kaduna main branch.
1.3
Objective
of the Study
The
main objective of the study is to examine the corporate governance and its
impact on the management of MTN Mobile Communication. The specific objectives
are:
i)
To examine the effect of corporate
governance on the performance of MTN.
ii)
To examine the internal and external
corporate governance control mechanism in MTN.
iii)
To identify the systemic problems of
corporate governance in MTN.
iv)
To proffer workable solutions to the
identified problem of corporate governance in MTN.
1.4
Significance
of the Study
The
study will be significant to MTN Mobile Communication especially as they
utilize the findings of this research in enhancing policy governance in their
organization. The study will also add to the existing knowledge on the subject
matter and will also be a reference material for further research on corporate governance.
1.5
Research
Questions
The
central research question is: What is the impact of corporate governance on the
management of MTN Mobile Communication? The specific questions are:
i)
How does corporate governance affect
the performance of MTN?
ii)
What are the internal and external
corporate governance control mechanism in place in MTN?
iii)
What are the systemic problems
militating against corporate governance in MTN?
iv)
What are the solutions to such
problems?
1.6
Scope
of the Study
The
study covers the examination of the impact of corporate governance on MTN
Mobile Communication. The collection of empirical data is limited to MTN Mobile
Communication Kaduna main office. The study covers a time from 2006 – 2011.
1.7
Definition
of Terms
Corporate
Governance:
This
is relationship that exists between the different participants, and defining
the direction of the firm.
Corporation:
This refers to corporate entity or a body by means of which capital is
acquired, used for investing in assets producing goods and services.
Shareholders:
People who have invested in a company through subscribing to the company’s
stock.
Board
Structure: Management at the top comprising of
board of directors.
Ownership
Structure: Shareholders and directors.
CEO:
Acronym for Chief Executive Officer.
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