Organizational framework and practices of corporate governance: a case study of National Investments Company Limited (NICOL)

The importance of good corporate governance for business and economic development is well recognized globally including Tanzania. However, some companies such as National Investments Company Limited (NICOL) have recently been adversely mentioned in the media due to some boardroom activities in which regulators and courts of law had to intervene. This research was based on the fact that companies are required to comply with corporate governance best practices in order to achieve sustained economic growth and development. This study examined the organizational framework and practices of corporate governance at National Investment Company Limited (NICOL). The data was collected through interviewing respondents from NICOL’s stakeholders: board of directors, management, shareholders, regulators, suppliers and employees. Reviews of key documents were studied and data culled from such documents. The study examined the current framework and practices of corporate governance at NICOL. It further identified and discussed the challenges associated with the company’s framework particularly in shareholder process, board of directors and roles of other stakeholders. Findings revealed that to a large extent NICOL did not comply with corporate governance best practices. The findings also show how the stakeholders reacted regarding noncompliance of the company. In particular, they suspended the company’s board and de-listed the company from Dar es Salaam Stock Exchange. This study therefore, highlighted the issues that need to be addressed by NICOL and Regulators to overcome the challenges and for further improvement of corporate governance at NICOL and other similar companies and in Tanzania as a whole. The study was limited to one collective investment company which is solely owned by Tanzanians. Therefore it can be extended to more companies of similar or different sectors with mixed of foreigners and Tanzanians in its ownership structure.