Abstract

In a corporation, management is employed by owners for specified functions from which utility of owners and management is to be derived. While executing their roles and obligations, management may consider fulfilling their interests at the expense of owners’ interests and vice versa. This results into agency problems. This study tests the relevance of the agency theory and examines whether existing governance mechanisms and ownership structure address agency problems in Savings and Credit Cooperatives (SACCOs) in Uganda. To accomplish this, a mixed research (both quantitative and qualitative) design is used. Self-administered questionnaire and personal interviews about: utility of owners and management, and governance mechanisms and ownership structure are administered onto the respondentskey informants-selected through stratified sampling of SACCOs in Uganda. Respondents’ perceptions about utility levels of owners and management, and governance mechanisms and ownership structure within the studied SACCOs; are analyzed using a 5-point Likert scale. From a sample of 252 SACCOs with minimum of 10 years of experience; by regional concentration; majority SACCOS (40%) are in Western Uganda followed by Central region (29%), Eastern (20%) and lastly Northern region (11%). Over 78% have membership of over 1000 shareholders. By level of education, majority management board members (65.1%) have a minimum of degree as academic qualification; with male gender dominance (91.7%).The computed average welfare index for SACCO owners is 4=disagree (=bad welfare).

How to Cite
BOAZ MUHANGUZI, Kibs. An Empirical Test of the Agency Theory in Corporate Governance of SACCOs in Uganda. Global Journal of Management And Business Research, [S.l.], june 2019. ISSN 2249-4588. Available at: <https://journalofbusiness.org/index.php/GJMBR/article/view/2765>. Date accessed: 17 aug. 2019.