Board Committees and Performance in Microfinance Institutions: Evidence from Ethiopia

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dc.contributor.authorDato, Muluneh
dc.contributor.authorMersland, Roy
dc.contributor.authorMori, Neema
dc.date.accessioned2019-02-19T03:32:43Z
dc.date.available2019-02-19T03:32:43Z
dc.date.issued2018
dc.description.abstractThis paper empirically relates subordinate board structures with improved financial and social performance in microfinance institutions (MFIs). The research question is analyzed using a panel data from 23 microfinance institutions in Ethiopia over a period of 2006— 2011. Random effects panel data estimation is applied to analyze the link between board committees and MFI's performance. In MFIs with larger than average boards, the findings demonstrate significant ties between financial and outreach performance and how their boards are structured. The structure of board committees moderates the relation between board size and financial and outreach performance measures. Importantly, board committee benefits MFIs through better operational self-sufficiency, lower operating expenses, greater outreach to customers, and outreach to poorer customers using average loan size as our proxy. Practitioners within microfinance sector, and those operating in advisory and regulatory roles to the sector could benefit from the argument advanced in the paper in that normative recommendation to restructure boards or establish committees requires reevaluating the board characteristics vis-à-vis the optimal monitoring, controlling, and advising needs of the institution. Prior literature focuses on who sits on boards, how large are the boards, and how independent are they. This paper advances our understanding of the structure of board committees and how this may affect the performance of MFI. This approach provides better representation of director's role and is thereby a good test of board effectiveness.en_US
dc.identifier.citationDato, M. H., Mersland, R., & Mori, N. (2018). Board committees and performance in microfinance institutions: Evidence from Ethiopia. International Journal of Emerging Markets, 13(2), 350-370. doi:doi:10.1108/IJoEM-08-2016-0216en_US
dc.identifier.urihttp://hdl.handle.net/20.500.11810/5075
dc.subjectcorporate governanceen_US
dc.subjectboard committeesen_US
dc.subjectmicrofinanceen_US
dc.subjectAfricaen_US
dc.subjectEthiopiaen_US
dc.titleBoard Committees and Performance in Microfinance Institutions: Evidence from Ethiopiaen_US
dc.typeJournal Article, Peer Revieweden_US
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