Effect of Corporate Governance on Financial Performance on Selected Insurance Company in Ethiopia.

Abstract

Corporate governance provides the structure through which the objectives of the company are set, and the means of achieving those objectives and monitoring performance are determined. The purpose of this study was to investigate the relationship between corporate governance mechanisms and financial performance of Insurance Company’s in Ethiopia. From the total of 17 Insurance which are operating in the country, eight Insurance Companies have been selected for the study by way of a purposive sampling. The study use ROA as dependent variables and Whereas, independent variables like (board size, board meeting frequency, board gender diversity, board experience in finance sector, board educational qualification and audit committee size, ) have been used . To achieve this objective descriptive and explanatory type of research design with a mixed approach, more of quantitative, was employed .Primary data was collected using structured questionnaires completed by the CEOs as they were in a better position to comment on corporate governance affairs. Secondary data was collected from the NBE. The study utilized panel data analysis methodology in drawing conclusions about the study. The findings of the study shows that board size , board gender diversity and audit committee size had negative and significant impact on the performance of Insurance Company’s in Ethiopia . On the other hand, board meeting frequency,board experience in finance sector and board educational qualification had a positive and significant effect on Insurance Company’s.