Corporate Governance and Financial Performance of Credit Unions in the Central Region of Ghana

Abstract

The purpose of this research was to determine the impact of Corporate Governance (CG) standards on the financial performance of Credit Unions in Ghana's Central Region. The research analysed the financial accounts of sixteen credit unions in Ghana's Central region from 2014 to 2018. Return on Asset (ROA) and Return on Equity (ROE) were used as proxies for financial success. The research accomplished its goals via the use of static panels, namely the random effect model. The research discovered that expanding the size of the board of directors had a substantial positive impact on ROA but a negative effect on ROE. Finally, the research discovered a substantial impact between credit risk and audit compliance. The study therefore recommended that management of credit unions should encourage larger board size due to the increased expertise it offers to the union. It is also recommended that the union should endeavour to comply with audit recommendations as this adherence will help strengthen existing internal controls of the credit unions which will eventually result in higher performance.