An Assessment of Corporate Governance Practice in Private Commercial Banks of Ethiopia: Case of Wegagen Bank
Keywords:
Board of Directors, Corporate governance, Companies, Ethiopia, Wegagen BankAbstract
Many academics have looked at the factors that influence economic behavior and their impact on economical decision, particularly cognitive bias. Dealers are often unaware of their prejudices and assumptions. If investors are aware of the prejudices they might face, they are greater likely to act rationally. to board and senior management to govern the bank. As banks are the backbone of a nation's economy, they need to implement sound corporate governance. In Ethiopia, most of the banks are private, but information on their corporate governance practices is limited. This study was designed to assess corporate governance practice in Wegagen Bank. Data were collected via questionnaire from board and senior managers, and from documents and analyzed using SPSS. Corporate governance like board size, BODs meeting and composition, role separations between CEO and board chairman, identifying and reviewing business risks, qualification of audit committee, competence of auditors, equal treatment of shareholders, strategic objectives and ethical standards were in line with codes of good corporate governance practices. However, the bank has showed some deviations and should comply to codes of good corporate governance practices in audit committee composition, auditors’ independence, internal auditors’ access to board chairman/audit committee, shareholders’ knowledge and exercising their rights, transparency about influential shareholders, lack of remuneration committee, CEO ownership concentration, directors pay/incentive.
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