Abstract:
The
study seeks to assess the corporate governance of selected financial
institutions and the role they play in the financial distress of the
organization. The study seeks to assess the corporate governance structure of
the institutions, identify various lapses in it, and the effect on the financial
performance of the organizations. The study adopts a descriptive research
design and quantitative in nature. The quantitative research approach was
conducted to enable researchers to use numerical data to analyze the data collected
to achieve the objectives of the study. A structured questionnaire was designed
for collecting data for the study. The results from analyzing the data set show that there are various components of the corporate
governance structures within the financial institutions, which are not present
to some level within the organizations contacted. Again, there were various
lapses such as the lack of inclusion of one or more independent non-executive
members in committees, the absence of an audit, compensation, and risk
management committees, and various lapses in the stakeholder rights in the
corporate governance that need to be rectified to enhance on the performance of
the organizations and the board characteristics and the internal controls had
significant effects on the financial performance of the financial institutions
whereas the transparency and disclosure and the shareholder rights had a lesser
effect on the performance of the organization. The advice made for the financial
institutions were there is the need for an outline of the corporate governance
structure of the financial institutions within the Sunyani Municipality to
ensure they meet the requirements and various lapses of corporate governance
given in the study, and also should be addressed to ensure the organization
meets the required features to avoid any future issues. Specifically, the rights of the stakeholder need
to be reviewed since the respondents of the study ranked the majority of the
variables low; the composition of the various committees, and the disclosure of
periodic reports by the financial institutions. This is due to lapses
identified in those areas by the respondents.