Effects of Corporate Governace Practices on Organisational Performance

Abstract

This study sought to investigate the effects of corporate governance practices on the operational performance of Christian Based Organizations based on a case of Compassion International Uganda (CIU), Kampala district. The study was guided by three objectives: to establish the relationship between board accountability and operational performance, to examine whether leadership collaboration influences operational performance and to assess the how board empowerment influences operational performance in Compassion International Uganda. The research was carried out using cross-sectional research design. A mixed methods approach was used. Both simple random and purposive sampling methods were used to generate a sample of 44 respondents that were involved in the study. Data was collected using questionnaires and interview guide administered on the board members, top management and support staff of Compassion International Uganda. Correlation results show that board accountability and operational performance are significantly and positively related (r= .551, p < .05), leadership collaboration and operational performance are significantly related (r = .613, p< .05), board empowerment and operational performance are significantly related (r = .456, p< .05). The regression results showed that leadership collaboration has the most effect on operational performance in CIU given a higher Adjusted R Square = .371 compared to that of board accountability and board empowerment with Adjusted R Square = .314 and Adjusted R Square = .194 respectively. This means CIU’s corporate governance practices have a statistically significant positive relationship with operational performance since all p values were below the alpha of 0.05 and as such the null hypothesis was rejected. The study recommended that members in Compassion International Uganda should keenly consider the corporate governance practices such as board accountability, leadership collaboration and board empowerment. The study also recommended the need to sanction Christian Based Organizations that do not adhere to transparency and disclosure requirements that are critical tenets of effective board governance.