EFFECT OF CORPORATE GOVERNANCE ON ORGANISATIONAL PERFORMANCE IN THE TELECOMMUNICATIONS SECTOR IN KENYA. A CASE OF SAFARICOM LIMITED

Abstract

The general purpose of this study was to investigate the influence of corporate governance on organizational performance in the telecommunications segment in Kenya. A case of Safaricom Limited. Specific objectives were: To examine the influence of board composition on the performance of Safaricom Limited, to examine the effect of stakeholder involvement on the performance of Safaricom Limited, to evaluate the effect of internal controls on the performance of Safaricom Limited, and to assess the effect of leadership structure on the performance of Safaricom Limited. The investigation was anchored by Agency theory, and it was supported by Stakeholder theory and Stewardship theory. A descriptive research design was employed for this investigation. The target population was 216 Safaricom management-level staff based at the head office in Westlands. The sample size was calculated using Fisher's method. The study's primary information was collected via the application of questionnaires provided electronically to respondents via email. A pilot test with 14 participants from a Safaricom branch was carried out for this study, mainly to determine any troublesome questions and to evaluate the viability and reliability. Data collected from questionnaires was cleaned to remove errors and then coded for organization before analysis in Microsoft Excel. Measurement descriptors like mean, standard deviation, and frequency tables summarized the data's characteristics, with results presented through tables and figures for clear interpretation. The findings highlight that Safaricom's board composition integrates diversity, appropriate size, competency, female representation, and operational independence, facilitating oversight and decision-making. The study concluded that stakeholder engagement is characterized by communication, feedback systems, and participatory practices, which enhance collaboration among various groups. The study also concluded that Safaricom maintains robust internal control mechanisms through risk management, audits, and compliance monitoring, supporting effective operational procedures. The leadership structure is marked by clear roles, collaborative styles, and accountability. The study’s recommendations include enhancing board diversity, improving stakeholder communication, strengthening internal controls, and maintaining a clear leadership structure. More investigation ought to concentrate on longitudinal studies of governance of corporations and performance, and comparative analyses across industries.