Analysis of the effectiveness of corporate governance in private firms in Kampala: A case study of commercial banks in Kampala
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The purpose of the study was to investigate the influence that corporate governance has on organizational performance in Commercial Banks in Kampala. The study was guided by the following specific objectives; identify key corporate governance practices, impact of transparency on organizational performance; contribution of accountability on organizational performance; and effect of board composition on organizational performance in commercial banks in Kampala. The study adopted a case study design and a sample size of 80 respondents comprising staff was selected using simple random sampling. Data was collected using structured questionnaires and in-depth interviews. The data was analyzed using Microsoft excel and SSPS version 20. The study was guided by the principal agency theory; an agency relationship arises whenever one or more individuals, called principals, hire one or more other individuals, called agents, to perform some service and then delegate decision-making authority to the agents. The major findings of the study revealed that there is a significant relationship between transparency, accountability, board composition and organizational performance. These three dimensions of corporate governance were seen to be predictors of the commercial banks performance. Thus management of commercial banks in Kampala need to pay close attention to transparency, accountability and board composition as key dimensions of corporate governance as they are key determinants of organizational performance.. The stakeholders in the financial sector should develop strategies in line with the study variable relationships to enhance organizational performance in financial institutions. The strategies will help foster the development and implementation of governance structures which promote profitability, cost reduction, growth and liquidity.