Management Specialized in Quality Management and Organizational Excellence

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Browsing Management Specialized in Quality Management and Organizational Excellence by Subject "Corporate Governance"

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    Corporate Governance and its Effect on Innovation in the Case of Private Commercial Banks in Ethiopia
    (Addis Ababa University, 2018-06) Wondwossen, Tesfaye; Jemal, Mohammed (PhD)
    Corporate governance carries strategic importance and should be addressed correctly by decision makers. Corporate governance literature suggests that diverse boards are a part of good corporate governance practice. However, it is not clear how good corporate governance particularly diverse board characteristics might affect the corporate innovation and innovation search strategies. Impact of corporate governance on innovation is still an area of study that has not been adequately researched in Ethiopia. This study sought to establish the effect of corporate governance on innovation of private banks in Ethiopia. The objective was accomplished by assessing the effect of female directors in the board, size of the board, directors' educational qualification and board independence on innovation. Due to availability of recent data, the study had targeted population of nine private banks from all operated in Ethiopia namely Awash, Abyssinia, Wegagen, United, NIB, Dashen, Oromiya-Cooperative, Birhan and Addis bank. The study entirely used secondary data obtained from publicized annual reports and websites of the individual banks. The researcher employed explanatory research design to explain the situation. Result from regression analysis showed that independent variables (female directors in the board, board size, educational qualification of directors’ and board independence) have significant positive effect on innovation (log of the numbers of automatic teller machines and point of sales terminal). The study thus concludes that the effect of corporate governance on innovation depends on the variables. The study thus recommends an evaluation of the board characteristics in private banks as it influences innovation.