Research
An Empirical Test of the Agency Theory in Corporate Governance of SACCOs in Uganda
In a corporation, management is employed by owners for specified functions from which utility of owners and management is to be derived. While executing their roles and obligations, management may consider fulfilling their interests at the expense of owners’ interests and vice versa. This results into agency problems. This study tests the relevance of the agency theory and examines whether existing governance mechanisms and ownership structure address agency problems in Savings and Credit Cooperatives (SACCOs) in Uganda. To accomplish this, a mixed research (both quantitative and qualitative) design is used. Self-administered questionnaire and personal interviews about: utility of owners and management, and governance mechanisms and ownership structure are administered onto the respondentskey informants-selected through stratified sampling of SACCOs in Uganda. Respondents’ perceptions about utility levels of owners and management, and governance mechanisms and ownership structure within the studied SACCOs; are analyzed using a 5-point Likert scale. From a sample of 252 SACCOs with minimum of 10 years of experience; by regional concentration; majority SACCOS (40%) are in Western Uganda followed by Central region (29%), Eastern (20%) and lastly Northern region (11%). Over 78% have membership of over 1000 shareholders. By level of education, majority management board members (65.1%) have a minimum of degree as academic qualification; with male gender dominance (91.7%).The computed average welfare index for SACCO owners is 4=disagree (=bad welfare).
Corporate Strategy and Firm performance: Case for the Multinational Banks in Sub Saharan Africa
Various studies have empirically examined the effect of corporate strategy on firm performance but not to the level of this paper’s methodological scope regarding time, geographic, and variable constructs. For external validity of research findings, this paper uses a more modern estimation procedure-the system Generalized Method of Moments GMM, on a panel data (2007-2017) for the multinational banks in sub-Saharan Africa. Relevant corporate strategy constructs for firms with multinational operations are adopted. These are; diversification, debt, and equity financing which are examined in relation to firm’s performance as measured by return on assets ROA. One provoking question motivating this inquiry is: Does it profit a firm to have operations in many countries when financing is by debt, and or equity? Such corporate strategies are expected to have positive returns. Findings however, show that unlike debt financing strategy, geographical diversification and equity financing positively affect the banks’ ROA. Therefore, investors and corporate manager should design their strategic plans from which the best strategies for implementation can be selected. Particularly,corporate decisions on questions about the bank’s where to go, and the source of funds for investment should keenly be addressed during strategic planning.
