The Effect of Corporate Governance on Organizational Performance in the Banking Sector: The Case of Selected Private Commercial Banks in Ethiopia

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Date

2021-06

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A.A.U

Abstract

This study aimed in examining the effect of corporate governance on organizational performance: the case of selected private commercial banks in Ethiopian (Dashen banks S.c, Zemen Bank S.c and Debub global bank S.c). To examine this both descriptive and explanatory study was conducted. The study population was comprised of 987 out of which ten percent of management respondent which is 282 respondents was participated. The sampling method employed was purposive sampling and structured questionnaire was used as a tool for data collection using five-point likhert scales. Both descriptive and explanatory (correlation and regression) statistics have been used to analyze the data using SPSS 22. Organizational performance using three indicators (customer satisfaction, employee commitment and organization reputation) was measured. Corporate governance dimensions employed in this study was board size, corporate governance mechanism, communication strategy and code of conduct. The regression result indicates that the corporate governance variables (board size, communication strategy and corporate governance mechanisms have positive and statistically significant effect on organizational performance. On the other way, organizational codes of conduct have positive but, statistically insignificant effect on organizational performance. This study recommends that private commercial banks should focus on improving corporate governance. Especially, making board size optimum is determinant issue for the success of the company followed by communication strategy should be their organizational focus area.

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Keywords

Corporate governance, Organizational performance, Private commercial banks

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