Corporate Board Leadership Structure and Financial Performance: The Stewardship And Agency Theoretical Perspectives Of Private Limited Firms In Uganda

Abstract

Purpose: This study aimed to establish the association between the board leadership structure and the financial performance of private limited companies in Uganda. Methodology: The study adopted a positivist paradigm and a cross-sectional design. 394 private companies were sampled from Central and Western Uganda. Quantitative data were collected from board members, accountants, auditors, and CEOs using a self-administered structured questionnaire. Pearson correlation and standard regression analyses were conducted for data analysis. Findings: The study established a positive relationship between a separate leadership structure and the financial performance of private companies. Separate leadership was confirmed as a recipe for private companies' financial success, accounting for 7% of the variance. The study also revealed that CEO duality was common amongst most private limited companies in Uganda. Unique Contribution to Practice and Policy: The study calls for a re-examination of the current policy on governance to make the corporate governance code obligatory to all firms and not just the listed entities. Regulators ought to reinforce their monitoring approach to effect adherence to the governance code.