Corporate Governance Practices And Performance Of Consumers Cooperative Societies In Addis Ababa City

Cooperatives are member owned and member financed organization. They have been a model forrncollecting societies together across all sphere of life. As the members of the cooperatives whosernrelationship with the cooperative managements are slight, the cooperatives are prone to governancernfailure. Especially in the consumer cooperatives there is a separation between the members/owners ofrncooperative and the cooperative management body. This separation of ownership and control creates therngovernance problems. Since governance is the key for the success of any cooperatives, it needs high levelrnattention by the concerned bodies and societies. The main objective of the study is to describe therngovernance practices and challenges of the consumer cooperative societies and examine whether therngovernance have a significant effect on the performance of consumer cooperatives in Addis Ababa City.rnThere are 141 consumer cooperative Societies in the City and they have similar stages of developmentrnand exhibit high level of homogeneity in aspects such as structure and leadership. For this the study usedrncensus. The study seeks to analyze the effect of various corporate governance mechanisms particularlyrnboard size, board educational qualification, board gender diversity and board meeting frequency andrnused mixed research approach by adopting quantitative method. The Linear regression is also used tornquantify the strength of the relationship between the independent variables (Corporate governancernpractices) and the dependent variable (performance). The finding indicated that the consumerrncooperatives are found to have operated in accordance with the country’s cooperative society’srnproclamation and regulation. The principles of corporate governance were adequately addressed in therngovernance practice of consumer cooperatives. With respect to challenges of consumer cooperatives inrnthe implementation of corporate governance that the consumer cooperatives board of directors lackedrncommitment and leadership; the cooperatives were suffered with the supplies of goods and services andrnaudit committees of the consumer cooperatives were incompetent to execute their duties. The finding alsornindicated that the corporate governance variables of educational qualification and board size have highrnimpact on the performance of the consumer cooperatives whereas gender diversity and meeting frequencyrnhave moderate effect on the performance of consumer cooperatives. Based on the result of the study it isrnrecommended that a separate cooperative governance code should be developed, board ofrndirectors and members should be trained to improve the performance of the cooperatives and arnpolicy should be designed to strengthen the female participation in the board

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