Effect of Corporate Governance on the Financial Performance of Banking Industry in Rwanda: (A Case Study-Commercial Banks in Rwanda) (Published)
This study investigated the effect of corporate governance on Financial Performance of commercial banks in Rwanda. The study has four objectives which determined how board size, CEO duality, institutional ownership, board composition affect financial performance of commercial banks in Rwanda. The study adopted a descriptive research design which assisted to examine the effect of corporate governance on financial performance of commercial banks. The population of the study was 120 composed by the senior managers of the commercials banks operating in Rwanda; and the sample size was 92 but only 76 responded to the questions asked which represent 84%.The key findings for this research were showing that board independence, board composition, institution ownership do not have an effect on financial performance since the majority of respondent have disagreed the effect of corporate governance variables on the financial performance of commercial banks. The analysis of variance has shown that corporate governance variables are not significant predictors to explain the increase of profitability represented by return on asset and return on equity since the p value was 0.447 and 0.186 respectively. This research has concluded that there is no effect between corporate governance using board size, board composition CEO duality as well as institutional ownership are not predictors of financial performance and recommended the regulatory body of commercial banks in Rwanda to provide a guidance on the use of corporate governance practices which may impact positively the financial performance of commercial banks
Keywords: Commercial Banks, Corporate Governance, Financial Performance
Corporate Governance Practices and Performance of Coffee farmer‘s Co-operative Societies in Kenya (Review Completed - Accepted)
The central thesis in this paper is that the performance of coffee farmer’s co-operative societies is a function of corporate governance mechanisms; Board Size, Board Composition and status of the Chief Executive Officer (CEO). The research settled on Cash Coverage Ratio and Return On Assets, as performance variables and was guided by the null hypothesis that there exists no linear relationship between the performance variables and the corporate governance mechanisms..The regression analysis result showed that there exist a linear relationship between performance and corporate governance practice in farmer’s co-operative societies, thus rejecting the null hypothesis. In genera the findings were ; societies with smaller size of boards posted better performance as compared with those with bigger sizes more than 9 members. The same results were for those societies whose board comprised of individuals with a mix of skills and the role of the CEO was separate from that of the Chairman. Indeed as suggested by the results the failure by coffee farmer’s co-operative societies in Kenya to embrace corporate governance have made them not to underperform.
Keywords: Corporate Governance, Corporate Governance Mechanisms, Performance