Challenges Facing Cooperative Financial Institutions in Compliance to Corporate Governance Practices

Abstract

This study examined the challenges facing cooperative financial institutions in conforming to corporate governance practices. The cross sectional study was conducted with sample size of seventy respondents, however responses were from sixty five respondents. Both primary and secondary data were collected. Primary data were collected through questionnaires, interview and secondary through documentary review. Data were analyzed using descriptive statistic. Findings revealed that fraud, low member's participation and insufficient board members knowledge and skills needed to make business judgments, weak internal control systems and low level of accountability were found to major challenges facing cooperative financial institution in complying with corporate governance practices. The study recommends for SACCOS to regularly organize business management skills training for the board members. This will improve the level of supervision and monitoring within the SACCOS. Furthermore cooperative laws and rules should stipulate heavy punishment for fraud practices since fraud has been regular practice in SACCOS. Regarding low level of member's participation, SACCOS should regularly provide training to its members to enhance their understanding of SACCOS operations and their position in decision making. Finally Supervisory committee members who are responsible for internal control must have accounting knowledge.