The Effect Of Corporate Governance Practices On The Financial Performance Of Public Enterprises In Ethiopia

The role of corporate governance in public enterprises differs from that of the private counterparts forrnthe principal-agent problem in this enterprises is more complicated. In this study the effects of corporaterngovernance practices specifically board size, board composition, board gender diversity and debt policyrnare investigated in the Ethiopian public enterprises context. The main objective of the study is to explorernthe theoretical and practical aspects of public enterprises, corporate governance, and theirrninterrelationship in the Ethiopian context. The study employed explanatory research design with anrneconometric panel data of 10 Pubic enterprises that covers the period 2012 to 2017. Both correlationrnanalysis and fixed effects regression model is adopted after conducting the necessary tests. Board size,rnboard composition and board gender diversity are found to have insignificant relationship with financialrnperformance whereas Debt policy has negative and significant effect on the performance of publicrnenterprises in Ethiopia. The control variable firm size has significant and negative relationship withrnfinancial performance while liquidity has no relationship with financial performance. The findingsrnsuggest that public enterprises in Ethiopia may improve their financial performance depending on thernmeasures being used.

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