Effectiveness of Corporate Governance on the Performance of Commercial Banks in Zimbabwe

Abstract

The study analysed the effectiveness of the governance within the Zimbabwean commercial banking sector. The study was based on the rationale that the Zimbabwean commercial banking sector had witnessed a negative trend in terms of return on investment. The study adopted a combination of exploratory and explanatory research designs and gathered data from 124 participants using questionnaires and interview guides. In terms of data analysis, the thematic analysis, descriptive statistics, correlation analysis and random effects panel regression was adopted with data for 12 banks for the period 2018-2020. The study revealed that effective boards can be rated based on board composition, independence and level of skill diversity. Most of the banks in Zimbabwe are using a formal two-tier structure, whereas other banks which are private owned are using a one-tier structure and others adopted the mixed tier system. The study concluded that both the size of the governing board and audit committee composition positively significantly influenced the Zimbabwean commercial banking sector.