Abstract

This study examines the effect of corporate governance on organizational performance, focusing on SONARA (Société Nationale de Raffinage) in Limbe, Cameroon. Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled. Effective corporate governance ensures accountability, transparency, and fairness in a company’s relationship with its stakeholders, including shareholders, management, employees, and the community. In Cameroon, like many developing countries, the significance of corporate governance in improving organizational performance has become a key focus for both public and private institutions.

The study employs a mixed-method approach to assess how corporate governance practices at SONARA influence its performance. Quantitative data were collected through a survey distributed to 120 employees, ranging from top management to operational staff, to evaluate their perception of corporate governance practices within the organization. Qualitative data were gathered through in-depth interviews with 10 senior managers to understand the strategic implementation of corporate governance policies and their effect on company outcomes.

Findings from the study indicate a strong positive correlation between effective corporate governance and organizational performance. Key components of corporate governance, such as board accountability, transparency in decision-making, and adherence to regulatory frameworks, were found to significantly improve SONARA’s financial and operational performance. Effective corporate governance practices helped in reducing risks, enhancing corporate reputation, and increasing investor confidence, all of which contributed to the company’s stability and growth.

However, the study also identified challenges that hinder optimal corporate governance at SONARA. These challenges include insufficient oversight from the board of directors, lack of regular auditing, and occasional breaches of compliance with regulatory standards. Additionally, a disconnect between the board and lower-level management was noted, which sometimes led to poor communication and inefficiencies in decision-making processes.

The interviews with senior managers highlighted the need for more stringent corporate governance policies, particularly in the areas of financial transparency and ethical leadership. Many managers emphasized the importance of continuous monitoring and evaluation of governance practices to ensure that they remain aligned with the company’s objectives and changing business environment.

In conclusion, corporate governance has a significant impact on organizational performance at SONARA. While the company has benefited from its current governance structure, addressing issues related to board oversight and compliance could further enhance its performance. The study recommends that SONARA strengthen its corporate governance framework by implementing regular audits, improving board-management communication, and fostering a culture of transparency and ethical decision-making.

Keywords: Corporate governance, Organizational performance, SONARA, Accountability, Transparency, Compliance, Cameroon, Board of directors, Financial performance, Ethical leadership.