Browsing by Author "Zenebech Koroto"

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    The Effects of Corporate Governance on Financial Performance of Commercial Banks of Ethiopia
    (A.A.U, 2025-06-05) Zenebech Koroto; Temesgen W. (PhD)
    This study investigates the effects of corporate governance mechanisms on the financial performance of commercial banks in Ethiopia. In light of the increasingly complex and regulated financial environment, sound corporate governance has emerged as a critical determinant of organizational performance, especially in banking institutions that face heightened agency problems due to information asymmetries. Drawing on agency theory, stakeholder theory, and resource dependency theory, this study employed a mixed-methods research design, combining quantitative analysis of panel data from 2019 to 2023 with qualitative insights gathered through interviews with board members from five major commercial banks in Ethiopia. The study examined six key governance variables—board size, board meeting frequency, board gender diversity, directors’ educational qualifications, directors’ industry experience, and chief executive officer (CEO) compensation—and assessed their influence on bank performance, as measured by return on assets (ROA). The regression analysis revealed that board size, frequency of board meetings, educational qualifications of directors, and industry-specific experience were positively and significantly associated with financial performance. However, gender diversity and CEO compensation showed no statistically significant effect. The findings underscore the importance of strengthening governance frameworks tailored to the unique structural and regulatory environment of the Ethiopian banking sector. This research provides empirical evidence to inform policymaking by the National Bank of Ethiopia and bank shareholders, and contributes to the literature on corporate governance in emerging economies, highlighting the context-specific nature of effective governance structures. It also offers practical implications for aligning governance reforms with performance enhancement in the Ethiopian banking industry.