Impact of Corporate Governance Mechanisms on Firm's Profit Performance

This book examined the impact of corporate governance mechanisms on firm performance of Ethiopian micro finance institutions. Data was collected from eight micro finance institutions in the financial year 2013-2018 and multiple regression analysis was used to determine whether the existing corporate governance mechanisms influence the firm performance or not. The analysis was based on balanced panel data over a period. To achieve the objectives, variables return on assets and return on equity were employed as the key variables that measure the performance of firms. On the other hand board size, board gender diversity, frequency of board meetings, board¿s political affiliation were used as independent variables and firm size and firm leverage used as control variable to measure the corporate governance. The independent variable of the study explained 50.52 percent of ROA. And there is statistically significant relationship between board gender diversity, board members political affiliation and firm profit performance (ROA) at 5 percent level of significance. Generally, the result is similar to earlier studies that corporate governance has an effect on firm performance.