Corporate Governance and Social Responsibility in Banking- Case Study Mogadishu Somalia


Authors : Abdulkadir Khalif Abdulle, Esin Okay

Volume/Issue : Volume 4 - 2019, Issue 12 - December

Google Scholar : https://goo.gl/DF9R4u

Scribd : https://bit.ly/2FkjrhY

The study was set to investigate effect of corporate governance and social responsibility on financial performance based on profits, sales growth and return on equity and return on assets in banks in Mogadishu Somalia. The study involved data collected from 168 respondents from the banks of Mogadishu Somalia. The data was collected entirely using the closed ended questionnaires. The study findings reveal that corporate governance had a significant effect on financial performance of the banks while corporate social responsibility had a non-significant effect on financial performance of the banks in Mogadishu Somalia. The study concludes that corporate governance in the commercial banks in Mogadishu Somalia is prevalent. The study conclude that an effective corporate governance generates improved profits, sales and returns to equity and assets. The study further concludes that improving corporate governance can enhance the entire financial performance for the commercial banks. The conclusion hence is that development of cooperate governance is fundamental for the organization. Secondly the study conclude that corporate social responsibility has a low contribution to financial performance of the banks in Mogadishu Somalia, though the contributions registered is visible in the significant sales increase, the effect on profits and returns to investments was low. The study recommends for the development and improvement of corporate governance decision making through effective having an incorporation of the top- level decision making to the operational level to develop a strong focal corporate governance decision for the banks. The study furthermore recommends for the adoption and improvement of corporate decision making to the organizations as means to developing an organization resource base for financial performance excellence. The state of corporate social responsibility can be developed through the need to provide a further venue of management in order to improve the state of the employees. Enough supporting of the employees provides a good avenue that is fundamental for the development and attracting the customers. There is need to improve the state of corporate social responsibility policies by assuring them of the support for the policy for development of employees.

Keywords : Corporate governance, Corporate Social responsibility, Financial Performance, Return on Equity, Return on Assets.

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