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Corporate Governance and Financial Performance of Selected Commercial Banks in Mogadishu Somalia

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Corporate Governance and Financial Performance of Selected Commercial Banks in Mogadishu Somalia CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE OF SELECTED COMMERCIAL BANKS IN MOGADISHU SOMALIA BY SAID HASHI AHMED 1174-05026-13781 A THESIS SUBMITTED TO THE COLLEGE OF ECONOMICS AND MANAGEMENT IN PARTAL FULFILLMENT OF THE REQUIREMENTS OF THE AWARD OF MASTER OF BUSINESS ADMINISTRATION OF KAMPALA INTERNATIONAL UNIVERSITY OCTOBER, 2019 i DECLARATION I declare that this research work entitled “corporate governance and financial performance of selected commercial banks in Mogadishu Somalia” is my original work and has not been submitted for any award at any academic institution. STUDENT: SAID HASHI AHMED Signature: ………………………………... Date: …………..………………………... i APPROVAL "I confirm that this research work in progress on corporate governance and financial performance of selected commercial banks in Mogadishu Somalia has been under my supervision and now is ready for submission to the college of economics and management of Kampala international university in partial fulfillment of the requirements for the award of master degree in Business Administration. SUPERVISOR: DR. OMWENO N ENOCK Signature:…………………………… Date:………………………………… ii DEDICATION I dedicate this piece of work to the almighty Allah who has enabled me to carry out research successfully and my beloved parents without forgetting my dear siblings. My sincere thanks go to my supervisor Dr. Omweno N. Enock for his patience, guidance to ensure that this work is perfect. I would also like to thank people who molded me to become what I am today through lessons and good advice they have given me. Thank you very much if it wasn’t for you I don’t think I would have achieved this. iii ACKNOWLEDGEMENTS All praise is to Allah Almighty, the most Compassionate sympathetic and the Merciful, Who bestowed and granted me the potential and ability to complete this research work. I would also like to send and pay my homage, honor and sweet sensation of respect to my loving and caring parents whose love, prayers and encouragement kept me steadfast, dedicated and enabled me to attain this target successfully. My sincere thanks go to my lecturers who have transformed me into a better and knowledgeable person through long academic struggle at Kampala international university. iv LIST OF FIGURE Figure 2. 1: Conceptual framework .......................................................................... 15 v LIST OF TABLES Table 3. 1: Showing Breakdown of Population and Sample of Respondents ................ 32 Table 4. 1: Demographic characteristics of the Respondents ...................................... 37 Table 4. 2: Transparency ......................................................................................... 38 Table 4. 3: Accountability ........................................................................................ 41 Table 4. 4: Board composition .................................................................................. 42 Table 4. 5: Organizational performance .................................................................... 44 Table 4. 6: Effect of transparency on financial performance of commercial banks in Mogadishu Somalia ................................................................................................. 45 Table 4. 7: Multiple Linear Regression analysis between the Dependent and Independent Variables ............................................................................................ 50 vi TABLE OF CONTENTS DECLARATION ........................................................................................................ i APPROVAL ............................................................................................................. ii DEDICATION......................................................................................................... iii ACKNOWLEDGEMENTS ........................................................................................ iv LIST OF FIGURE .................................................................................................... v LIST OF TABLES .................................................................................................... vi TABLE OF CONTENTS .......................................................................................... vii LIST OF ABBREVIATIONS ..................................................................................... x ABSTRACT ............................................................................................................. xi CHAPTER ONE ........................................................................................................ 1 INTRODUCTION .................................................................................................... 1 1.0 Introduction ........................................................................................................ 1 1.1 Background of the Study ..................................................................................... 1 1.1.1 Historical Perspective ........................................................................................ 1 1.1.2 Theoretical Perspective ..................................................................................... 3 1.1.3 Conceptual Perspective ..................................................................................... 3 1.1.4 Contextual Perspective ...................................................................................... 7 1.2. Problem statement ............................................................................................. 8 1.4 Research Objectives ............................................................................................ 9 1.5 Research Questions ............................................................................................. 9 1.6 Hypotheses ......................................................................................................... 9 1.7 Scope of the study ............................................................................................ 10 1.7.1 Geographical Scope ........................................................................................ 10 1.7.2 Content Scope ................................................................................................ 10 1.7.3 Time Scope .................................................................................................... 10 1.8 Significance of the study .................................................................................... 11 1.9 Operational definition of key terms ..................................................................... 11 CHAPTER TWO ..................................................................................................... 13 LITERATURE REVIEW ......................................................................................... 13 2.0 Introduction ...................................................................................................... 13 2.1 Theoretical Review ............................................................................................ 13 2.3 Review of related literature ................................................................................ 16 2.3.1 Relationship between Transparency and Organisational Performance ................ 17 2.3.2 Relationship between Accountability and Organisational Performance ................ 21 2.3.3 Relationship between board composition and organisational performance .......... 24 2.4 Related Studies ................................................................................................. 26 vii 2.5 Research Gaps .................................................................................................. 28 METHODOLOGY ................................................................................................... 30 3.0 Introduction ...................................................................................................... 30 3.1 Research Design ............................................................................................... 30 3.2 Study population ............................................................................................... 31 3.3 Sample Size ...................................................................................................... 31 3.4 Sampling technique ........................................................................................... 32 3.5 Sources of Data ................................................................................................ 33 Primary data ........................................................................................................... 33 3.6 Research Instruments ........................................................................................ 33 3.6.1 Structured Questionnaire ................................................................................ 33 3.6.2 Document Review Checklist ............................................................................ 33 3.7 Validity and Reliability of Research Instruments .................................................. 33 3.7.1 Validity .......................................................................................................... 34 3.7.2 Reliability ....................................................................................................... 34 3.8 Data gathering procedure .................................................................................. 34 3.9 Data Analysis ...................................................................................................
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