The Effect of Corporate Governance on the Return on Asset of Insurance Companies in Ethiopia
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Date
2018-01
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Addis Ababa University
Abstract
The study looked at the effects of corporate governance on ROA of Insurance companies in
Ethiopia. This explanatory study sought to analyze the effect of different corporate governance
mechanisms, particularly board size, variety number of internal board sub-committee,
meeting frequency, CEO duality, gender diversity and educational qualification of directors on
the ROA of 9 privately owned insurance companies of Ethiopia. In order to achieve this
objective, the study used mixed research approach that is by adopting the quantitative method
supplemented by the qualitative method of inquiry that helps to get benefits of a mixed methods
approach and to mitigate the bias in adopting only either quantitative or qualitative approach
as well as capturing and administrating primary data using unstructured questionnaire and indepth interviews which were completed by board secretary and delegated staffs as he/she
is in a better position to comment on corporate governance affairs. Panel data covering
10-year period from 2006-2016 was analyzed and regression result with recommendation are
displayed for the selected 9 insurance companies. The Fixed effect model technique has been
applied to find out the most significant variables from considered corporate governance
variables and estimate the regression equation. The findings indicated that board size and
variety, number of internal board sub-committee had positive effect on insurance company ROA
whereas board meeting frequency had negative impact on ROA. Future researchers need to
focus on these significant variables and additional corporate governance mechanisms.
Description
A thesis submitted to MBA coordination office in partial fulfillment of the requirements for degree of masters of business administration in management
Keywords
Corporate Governance, Insurance companies, ROA