An Assessment of Corporate Governance Practice in Private Commercial Banks of Ethiopia: Case of Wegagen Bank

Abstract

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.