The Impact of Corporate Governance Mechanisms on Firm Performance: A Study on Insurance Companies in Ethiopia
No Thumbnail Available
Date
2022-01-02
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U.
Abstract
Corporate governance is considered as the most efficient way of supervising the operations of a
firm and ensuring the main goal of a firm to maximize shareholders wealth is taken care of. The
study aimed to determine the impact of corporate governance mechanisms on the performance of
insurance companies in Ethiopia. The study adopted an explanatory research design and a sample
Size of 160 respondents comprising staff was selected using purposive sampling. The study used
questionnaires as a tool for data collection. The data was analyzed using Microsoft excel and
SSPS version 26. The study comprised of 16 insurance companies specifically, this study examined
Board size, Board diversity, Board meetings frequency, number of board committee, audit
committee, Board educational qualification, Board industry specific experience and their
Relationship with organizational performance of insurance companies in Ethiopia. Pearson
correlation and multiple linear regression analysis were employed to estimate the causal
relationships between corporate governance mechanisms and firm performance. Finally, the
responses of the respondents were analyzed using descriptive Statistics,
correlation, and regression. The finding of the study revealed that all corporate governance
mechanisms have statistically significant and positive effect on firm’s performance. The overall
finding of the study suggests that corporate governance mechanisms play important roles in
determining organizational performance of insurance companies in Ethiopia. The study concludes
that there is a strong relationship that exists between corporate governance mechanisms and firm
performance. Therefore, the study recommends that shareholders should put a lot of emphasis on
corporate governance mechanisms so as to enhance firm performance.