The history of formal microfinance sector m Ethiopia has counted arndecade of age. During its existence, the sector has achieved success withrnrespect to reaching and satisfying the micro financial need of thernrelatively marginalized section of the society. Yet, there existsrntremendous unmet demand for the service. In addition, the sector sincernits existence has been facing a number of challenges hindering its growthrnand sustainability. Among these challenges, the issue of governance isrnone of the most pressing challenges facing the sector.rnThis study examines the practices of governance among MFIs with arnfocus on ownership structure and corporate governance. To this end, thisrnpaper made a study on 16 sample MFIs drawn from the sector andrnidentified a number of weaknesses associated with the governancernpractices of the surveyed MFIs. Accordingly their ownership composition,rneffectiveness of board composition, functions and responsibilities are notrnin line with best microfinance governance practices.rnThe form of ownership that almost all MFIs exhibited i.e. nominalrnshareholding has been found to be unconducive for effective exercise ofrngovernance in relation to ensuring commitment and putting in placernproper responsibility and accountability among boards that are drawnrnfrom shareholders. Thus, local governance standards, code of conductrnfor boards and risk management guidelines are so far non-existent in thernsector.rnIn addition, the poor functioning of dividend policy, performancernmanagement system are among the weaknesses revealed in the study. Inrnlight of the findings of the study, recommendations that could addressrnthe observed weaknesses are forwarded.