Impact of Board Diversity on Firm Performance

Hasan, Fakhrul; Islam, Mohammad Raijul

doi:10.21203/rs.3.rs-1905244/v2

Cited by 1 publication

(1 citation statement)

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“…However, it is necessary to conclude that not enough information has been demonstrated in some studies and scholarly articles about the relationship between board composition, leadership, board size in whose hands lies the responsibility of transparency and accountability when it comes to DT-SACCOs operations in Meru County [32][33][34][35][36][37]. As a result, the present study sought to fill this gap by examining the effects of corporate governance on the financialperformance of deposit taking SACCOs in Meru County.…”

Section: Statement Of the Problemmentioning

confidence: 99%

Effects of Leadership on Financial Performance of Deposit Taking Saccos in Meru County

Kiriinya,

Nyariki

2023

AJEBA

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The emergence of Savings and Credit Co-operative Societies has been hailed as one of highly captivating financial sector in the world as a result of offering an alternative to financial intermediary and economic growth. However, over and above all the poor financial performance of these SACCOs has been subject of concern and it’s hinged on inadequate corporate governance. As a result, the purpose of this research is to establish the influence of leadership on financial performance of deposit taking SACCOs in Meru County. In this study, Stakeholders theory has been chosen to guide the study. The population of interest in this study will comprise of 12 DT- SACCOs with a target population of 120 participants drawn from the 12 DT- SACCOs in Meru County, the study population will comprise of CEOs, Executive Board Members, and operational Managers of the SACCOs. The study will employ census and purposively sample all the120 to participate in the study. Structured questionnaires with a five-point non-comparative Likert scale will be used to collect primary data. Data collected will be both qualitative and quantitative and will be analyzed by descriptive and inferential statistics. Statistical Program for Social Sciences (SPSS) will be used to analyze the data. The findings were presented using tables, charts, percentages, tabulations, means and other measures of central tendency. Tables were used to summarize responses for further analysis and facilitate comparison. This generated quantitative reports through tabulations, percentages, and measures of central tendency. The findings of this study established a strong positive correlation between board composition and financial performance of SACCOs. Academic qualification and occupation had the highest influence on SACCO’s financial performance with r (33) = 0.851, p < 0.05 and r (33) = 0.845, p< 0.005 respectively. It was however noted that there was a weak positive correlation between gender and SACCO’s financial performance, r (33) = 0.432, p < 0.05. It was also established that there is a strong negative correlation between size of board and SACCO’s financial performance, r (33) = - 0.784, p < 0.05. This means that the fewer the board members the better the financial performance of SACCOs. Besides, a strong positive correlation between board leadership and SACCO’s financial performance was determined, r (33) = 0.812, p < 0.05. A strong positive correlation between transparency and accountability and SACCO’s financial performance, r (33) = 0.884, p < 0.05 existed. The coefficient of determination R square was 0.542 which implied that 54.2% of variation in the dependent variable is determined by the independent variables (predictors). It also means the goodness of fit test is fulfilled. This also means that all the factors (board composition, board size, leadership, transparency and disclosure) significantly predict financial performance of SACCOs, with transparency and accountability having the highest prediction (ß = 2.208).

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