CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE

OF PUBLIC UNIVERSITIES IN UGANDA

BY
Akodo Robinah
Administrator
E-MAIL: arobinah@yahoo.com
MAKERERE UNIVERSITY BUSINESS SCHOOL

ABSTRACT
The study examined the relationship between Corporate Governance and Financial Performance in
four Public Universities in Uganda. The study was prompted by Institutional turbulences as a result
of adhoc policy and decision making processes and poor financial performance of Public
Universities.
The study aimed at establishing the relationship between corporate governance, Board roles,
contingency, board effectiveness and financial Performance of Public Universities. A cross
sectional and correlational study was conducted in four public Universities in Uganda. Statistical
Package for Social Scientists (SPSS) was used and Spearman Correlation Coefficient and Multiple
Regression Analysis to determine the magnitude of the relationship and prediction of financial
performance respectively were applied.
The findings revealed that corporate governance variables namely; board size, had a negative
effect on financial performance while policy and decision making had a significant positive
relationship with financial performance. Corporate Governance had a significant positive
relationship with board roles, board roles had a significant positive relationship with board
effectiveness, and contingency had a significant positive relationship with board roles and
effectiveness.
There is need for Public Universities to formulate policies and make decisions that can stand test of
time. Constitute manageable Council and Senate committees, understand their roles, manage
contingency and improve on board effectiveness to realize improved financial performance.
Key words: Corporate Governance, Contigency, effectiveness and financial performance

Background of the study

Corporate Governance has come to mean many things. Traditionally and at a
fundamental level, the concept refers to corporate decision making and control,
particularly the structure of the board and its working procedures. Hermes,
(2004). Jenifer, (2002) defines Corporate Governance as a set of interlocking rules
by which corporations, shareholders and management govern their behaviour. In
each country, this is a combination of a legal system that sets some common
standards of governance and systems of behaviour determined by firms
themselves.
Corporate Governance scandals and accounting failures such as Maxwell in the
UK and Enron in the US have been dominating business debates during the last
decade. An increasing and ethical problems are recognized as symptoms of failing
Corporate Governance and systems of accountability and control in publicly
quoted firms Igor, (2004).
Universities and other Tertiary Institutions in Uganda are governed by University
and Other Tertiary Institutions Act 2001and an amendment Act 2003. The Acts
empower Universities to constitute governing boards; councils, appointments
boards, senate and academic boards. The governing boards /University councils
monitor and control performance of Universities and other Tertiary Institutions as
stipulated by Act 2001and an amendment Act 2003. The creation of a board of
Directors is to monitor the performance of the firm (Kosnik, 1987, 1990;
American Law Institute, 1982). It is, therefore predicted that if the Board
performs its duties effectively, the value of the firm is predicted to increase and
the wealth of shareholders would be enhanced accordingly.
According to Kyambogo University strategic plan 2006/07 a number of polices
were approved by council that include restructuring of staff, appointments,
salaries and benefits. These have caused academic staff unrest at Kyambogo
University. The academic staff took the issue to courts of Law, (Daily Monitor
Newspaper, July 2005) which courts ruled in favour of the academic staff and
ordered management of Kyambogo University to reverse the earlier decision on
appointment letters. Kyambogo University council did not play its role to the
satisfaction of the academic staff instead the courts of law had to resolve the
matter. The legal costs paid by the University in addition to the time lost, and
unrest caused disruptions in operations of University.
There was turbulence caused by the non-academic staff of Kyambogo University
for fear that the University management could delay issuing integration letters to
unfairly lay them off and replace them with other people, (Red Pepper News
paper September 30, 2006).
Makerere University council approved a new fees structure for the academic year
2005/2006 which were in the Makerere University strategic plan 2005/06 which
caused public outcry and Government had to intervene and stopped the increment
in fees, (Daily Monitor News paper August 22, 2005). Makerere University
Business School Council in 2003 as an affiliated Institute of Makerere University
approved new fees structure which included computer and medical fees
recommended by Management in the strategic plan 2003/04 and were to be paid
annually by all students. However, continuing students agitated and refused to pay

computer and medical fees. This caused unrest in the student community to the
extent of students disrupting lectures at MUBS campus (Daily Monitor
Publications October 18, 2005). Mbarara University of Science and Technology
has a debt of Shs 420 million as compensation to former owners of University Inn
buildings since 1989 which the University Council and Top management have
failed to settle and instead continue to appeal to Government for their rescue
(MUST Annual Financial reports 1990 2005) . The University is under threat to
be sued, (Red Pepper News paper September 11, 2006). The University Council
and Top management by now could have put up measures to generate funds to
clear the debt, therefore the continued indebtedness may cripple the financial
performance of the University and may also retard the institutional life cycle. Red
In the Red Pepper News paper September 11, 2006, Gulu University Academic
Staff had a sit down strike protesting non- payment of Salary Arrears and non
remittance to NSSF (NSSF Annual Reports 2005- 2006) and URA (URA Annual
financial reports 2005 2006) monies deducted from their salaries,. Public
Universities continue to experience low revenue collections that do not match the
expenditure figures, as evidenced in table 1.1below.
Table 1.1: Actual Revenue and Actual Expenditure for the Financial Year
2004/05
University Actual Revenue
Actual Expenditure Variance
Kyambogo 20,345,236,770
22,345,632,123
-2,000,395,353
Gulu
6,050,535,230
6,567,254,246
-516,719,016
Makerere
54,658,205,038
56,933,077,000
-2,274,871,962
Mbarara
12,456,743,520
12,865,290,340
-408,546,820
Source: Financial Reports 2004/5 of the four Universities.
The question that remains to be answered is: Do councils function effectively in
setting up appropriate policies, decision making and monitoring the performance
of public Universities? Therefore there is need to investigate the institutions
financial performance.
Statement of the problem
Although council and senate in public Universities exist, Universities have
continued to experience governance problems such as fees determination
problems, payment schedules not respected, Student and staff unrest, staff welfare
problems, legal action against councils, which could be attributed to corporate
governance and institutional turbulence. If corporate governance and institutional
turbulence remains unchecked, the Universities financial performance may be
crippled.
Purpose of the study
The purpose of the study was to establish the relationship between corporate
governance and financial performance of public Universities in Uganda.
Research objectives
a)
To establish a relationship between Corporate Governance and board
roles.
b)
To establish a relationship between board roles and board effectiveness.

c)

To establish a relationship between board roles, board effectiveness and

contingence.
d)
To establish a relationship between corporate governance and financial
performance.
e)
To establish the relationship between corporate governance, board roles,
contingence, board effectiveness and financial performance.
Research questions
a)
What is the relationship between corporate governance and board roles?
b)
What is the relationship between board roles and board effectiveness?
c)
What is the relationship between board roles, board effectiveness and
contingence?
d)
What is the relationship between corporate governance and financial
performance?
e)
What is the relationship between board governance, board roles,
contingence, board effectiveness and financial performance of public
Universities?
Scope of the study
Geographical scope
The study was conducted on Non profit making public Universities namely
Makerere University, Kyambogo University, Mbarara University of Science and
Technology and Gulu University.
Subject scope
The current study focuses on corporate governance in terms of board size, policy
and decision making. Board roles in terms of monitoring and control, access to
resources, strategizing and advices and counsel. Board effectiveness in terms of
skills and knowledge, committees, delegation and risk management. Contingency
in terms of management experience, institutional turbulence and institutional
lifecycle and financial performance in terms of revenue performance, expenditure
performance and value for money for non profit making institutions. The study
acknowledges other measures of corporate governance in profit making
organizations like transparency, disclosure, trust, accountability and the CAMEL
model as a measure of financial performance which are not part of current study
and have been largely researched on.
Significance of the study
i)
The study benefits Public Universities in effective corporate governance
on the existing knowledge.
ii)
The study enhances on the existing body of knowledge.
iii)
The study helps stakeholders in capacity building of certified training in
corporate governance.
Conceptual Framework
Fig 1: Conceptual Framework

Corporate Governance
Board size
Policy & decision making

Board
Effectiveness

Board Roles

Skills &
Knowledge
Committees
Delegation
Risk management

Monitor & Control

Access to Resources
Strategizing
Advices & Counsel

Financial
Performance
Revenue collection
Performance
Expenditure performance
Efficiency

Contingency
Management experience
Institutional turbulence
Institutional life cycle

Source: A modification of the model by Gavin & Geoffrey (2004).

Corporate governance enhances financial performance Gavin & Geoffrey, (2004).
Through board roles and board effectiveness, corporate governance also leads to
improved financial performance, while contingency moderates the link between
board roles and board effectiveness. Corporate governance enhances on the board
roles which further enhance on board effectiveness and financial performance of
organizations.
If board roles are implemented well, it leads to board effectiveness and thereby
enhancing on organizational financial performance.
LITERATURE REVIEW
Corporate governance
Corporate governance is referred to the manner in which the power of an
organization is exercised in the stewardship of the Corporations total portfolio of
assets and resources with the objective of maintaining and increasing shareholders
value with the satisfaction of other stakeholders in the context of its corporate
mission (Private Sector Corporate Governance trust, (1999). The committee on
the financial aspects of corporate governance (the Cadbury Committee), defines
corporate governance as the system by which companies are directed and
controlled. Corporate Governance is both about ensuring accountability of
management in order to minimize downside risks to shareholders and about
enabling management to exercise enterprise in order to enable shareholders to
benefit from upside potential of firms Keasey and Wright, (1993), Tricker, (1984).
Gedajlovic et al., (2004) extend an agency perspective on governance to suggest
that particular blend of incentives, authority relations and norms of legitimacy in
founder firms interacts with the external environment to affect the nature and pace
of learning and capability development.
Zahra and Filatochev, (2004) argues that corporate governance systems and
organizational learning are independent, and in some cases may substitute or

complement each other. The decision making style of the board has been linked to
corporate performance Pearce and Zahra, (1991). Prior research has investigated
the immergence of corporate governance in developing economies in the context
of corporate governance reforms, Rwegasira, (2000) has examined Africa.
Krambia and Psaros (2006), investigated the implementation of Corporate
Governance principles in an emerging economy of Cyprus and the findings
indicated only a minimal impact unless it is supported by other initiatives. Further
noted that Cyprus was making serious endeavors to improve the corporate
governance of its listed companies.
Solomon et al., (2000, 2003) argues that for developing countries to be
internationally competitive and attract foreign capital they need to adopt
commonly accepted standards of corporate governance implies standards based
on the Anglo-Saxon model. Rwegasira (2000) states that for the Anglo- Saxon
model to be effective, company shares need to be owned by widely dispersed
owners.
The Organisation of Economic Co-operation and Development (OECD), (2004)
provides the most authoritative functional definition of Corporate governance:
Corporate governance is a system by which business corporations are directed
and controlled. The corporate governance structure specifies the distribution of
rights and responsibilities among different participants in the corporation, such as
the board, managers, shareholders and other stakeholders and spells out the rules
and procedures for making decisions on corporate affairs. By doing this, it also
provides the structure through which the company objectives are set and the
means of attaining those objectives and monitoring performance.
Witherell ,(2004) noted that regional roundtables on corporate governance set up
in partnership with the world Bank have allowed the OECD principles to become
a widely accepted global benchmark that is adaptable to varying social, legal and
economic contexts in individual countries.
Indeed the out come of a survey by Mckinsey in collaboration with the World
Bank in June 2000 attested to the strong link between corporate governance and
stakeholders confidence (Mark, 2000).
Corporate governance is important because it promotes good leadership within the
corporate sector. Corporate governance has the following attributes; leadership for
accountability and transparency, leadership for efficiency, leadership for integrity
and leadership that respects the rights of all stakeholders, Institute of Corporate
Governance of Uganda, (2000). Lack of sound corporate governance has enabled
bribery, acquaintance and corruption to flourish and has suppressed sound and
sustainable economic decisions. Some key pillars (Private Sector Corporate
Governance trust, (1999) on which good governance is framed include;
The institution must be governed with a framework which should provide an
enabling environment within which its human resources can contribute and bring
to bear their full creative powers towards finding solutions to shared problems.
Rossette,(2002) carried out the extent to which board composition affects team
processes, (orientation, communication, feedbacks, coordination, leadership and
monitoring), board effectiveness and performance of the selected financial
institutions in Uganda.

Matama, (2005) used three basic tenets of Corporate governance; transparency,

disclosure and trust in relation to commercial bank financial performance in
Uganda which is a profit making organization.
Masibo, (2005) focused on the board structure and board process in relation to
state owned corporations set for divestiture and those listed on Uganda securities
exchange which are profit making.
In line Gavin and Geoffrey (2004), the current study focuses on board size, policy
& decision making as indicators of Corporate Governance in relation to board
roles, contingency, board effectiveness and financial performance of public
Universities in Uganda.
The concept of accountability though not listed in the scope of the study the
accountability concept cannot be overlooked when reviewing corporate
governance literature. Accountability relationships occur in every sector of the
society including the commercial sector (Wheelers, 2000). Where there is
inadequate accountability resources will be used inefficiently and ineffectively;
thus, inadequate accountability can result in devastating consequences for
millions of people and compromising the operations of an organization (Kluver,
2001). Accountability is multifaceted and complex, at the heart of which is the
notion of one party rendering an account of the use of resources to another party.
Gray and Jenkins (1993) have the opinion that accountability is an obligation to
present an account of and answer for the execution of responsibilities to those
who entrusted those responsibilities, the principal/agent relationship Kluver,
(2001). Accountability forms the basis of the trust in organizations, so when
accountability relationships are undermined then our trust in organizations is
damaged. While accountability might at first seem to be easily defined the reality
is that it is a complex multifaceted concept. Much of the earlier researches
focused on accountability as measure of Corporate governance, this study is
focused on board size, policy and decision making.
Board size
When the board has adopted a clear view of its responsibilities in governing the
company, the directors can then move to discuss and agree the most effective way
of structuring the board. Consideration could be given to the size of the board
itself; is the board too small or too large to adequately fulfill its requirements,
given the size and complexity of the organization? The balance of the executive
and non-executive directors and whether independent directors are necessary is
another structural issue to consider. Likewise does the board have the optimal
skills mix to deliver effective governance considering the nature of the company
governed? Depending on the circumstances, the board may benefit from having a
member with industry experience, legal expertise or perhaps a director
representative of stakeholder. Gavin and Geoffrey, (2004).
Board size defined as the total number of directors on a board (Panasian et al.,
2003), has been regarded as an important determination of effective Corporate
governance (Bonn et al., 2004). The optimal board size according to Goshi et al.,
(2002) includes both the executive directors and non executive directors.
Forbes and Daniel (1999) argued that although board size is not truly a
demographic attribute, it is unlikely to have effect on board functioning. Despite

the considerable amount of effort in research on board size for more than a decade
there is still lack of consensus among researchers on its relevancy. This
inconclusive nature in board size research quality and experience of independent
directors on the board than sheer numbers of individuals (Keegen & Gilmour,
2001).
There has been considerable debate on whether large boards perform better than
smaller boards. Daily (1995) argue that greater number of directors might increase
available expertise and resource pool while Bonn et al., (2004) contends
expanding the size of the Board provides an increased pool of expertise,
information and advice quality not obtained from other corporate staff. In
contrast, the difficulty inherent in coordinating the contributions of many
members can be complex, hindering them to use their knowledge and skills
effectively (Forbes & Daniel 1999, Epstein et al., 2004).
From agency perspective, increase in board increases the Boards monitoring
capacity but costs that accrue from large boards may facilitate CEO dominance
over board members. For instance large boards have difficulty in building the
interpersonal relationships that further cohesiveness, or maintain high board effort
norms owing to social loafing that exists in large boards (Forbes & Daniel, 1999).
Studies such as Bonn et al., (2004) have also supported previous authors and
concluded that when the board size is very large, the disadvantages such as lack of
cohesiveness, coordination difficulties and fractionalization are most severe and
they became less prevalent as board size decreases. In contrast very small boards
cannot enjoy the advantages of the pool of expertise, information and advice of a
larger board and these benefits emerge when the board becomes larger. To date
there are still wide views on an optimal board size. According to Leblanc &
Gillies (2003), an 8-11 persons board may be considered optimal. In a recent
study by Epstein et al., (2004), a board of 9-13 members is typically right for most
companies but too small for large ones. Goshi et al., (2002) considered an average
of 16 directors (3 within and 13 outside directors) to be appropriate for larger
companies, though respondents in this study believed that 12 is the most effective
board size. The study by Connelly & Limpaphayom (2003) revealed that the
average board size of insurance firms in Thailand was 10 but ranged from a low
number of 4 members to a high number of 16 members. The current study is
focused on Board size in terms of the number of University Council and Senate
Members as stipulated by the Statute.
Policy and decision making
The final function that a board needs to consider is its duty with respect to
delegating authority. Given the complexity of the business environment, it is
impossible for the board to be the sole decision making body in the company.
Instead, each board needs to work on developing an appropriate method and level
of delegation of authority. Obviously this will again vary with the context facing
the board but, in all circumstances, the board needs to clearly articulate and
document the delegations it makes Gavin and Geoffrey, (2004).
Board roles
Board effectiveness occurs via the execution of roles set that is conceptualized by
different researchers in different ways Hung, (1998), Johnson et al, (1996), Lipton

and Lorsch, (1992). What is clear is that the roles of the board have evolved over
time. Defining a clear role set is difficult as different disciplines concentrate on
different areas of interest. Pettigrew, (1992) identified six themes of academic
research on the role of managerial elites such as chairpersons, presidents, Chief
executive Officers (CEOs) and Directors. These include the study of interlocking
directorates and the study of institutional and societal power, the study of boards
and Directors, the composition and correlation of top management teams, studies
of strategic leadership, decision making and change, CEO compensation and CEO
selection and succession. There are, however board roles that receive board
support Gavin and Geoffrey, (2004) as explained below.
Monitoring and control
The first role of the board is controlling and monitoring management, a role made
necessary by the separation of ownership from control Berle and Means, (1932).
They added a separate strategizing role of the board. This role is normally
subsumed under advising role. The strategizing role is included for three
reasons; the increasing performance pressures being applied by institutional
stakeholders Black, (1992), board perception of the importance of the strategizing
role Tricker, (1984) and recent legal precedent that places corporate goal setting
and strategic direction squarely within the boards charter Baxt, (2002), Glaberson
and Powell, (1985), Kesner and Johnson, (1990).
Strategizing
The boards objective in strategy formulation is to ensure that the strategy of the
company will lead to the long-term creation of shareholder wealth or other stated
major goals of the organization. However, the level of board involvement will
vary from company to company. For example, the board may see its role as
developing the strategic questions for management to answer, when another
approach sees the board setting broad objectives for management to implement,
Gavin and Geoffrey, (2004).
Accessing resources
All companies what ever their size or nature of business, need access to outside
resources if their businesses are to succeed. These resources vary enormously
from company to company, but fall into main categories, as information and
physical resources. Developing business networks and working to promote the
reputation of the firm are two other important ways that a board can add value to
the company. By acting in an open, professional and ethical manner in their
dealings with people outside the organization, board members also raise the
profile of the firm and enhance its reputation Garvin and Geoffrey, (2004).
Advice and counsel
The role Directors play in providing advice to the chief executive officer (CEO) is
a link between the direction of the company and the day to day implementation of
the direction which is the responsibility of the CEO. The board is a key source of
knowledge and experience for the organization it governs. Therefore it is
important for the board to share its experience with management, particularly the
CEO, to serve the interests of the company Gavin and Geoffrey, (2004).

Advising the CEO is widely acceptable Lorsch and Maclver, (1989) and also
resource dependence perspective, which envisages a role for directors in
providing access to resources, including information Pfeffer, (1972).
Contingency , board roles and board effectiveness
While all boards are required to undertake activities within the spectrum of this
roles set, they contend that each organization will need a different emphasis
among these roles. Thus, there is need to explicitly incorporate a contingency
perspective Heracleous, (2001), Donaldson and Davis, (1994), Johnson et al ,
(1996). Since a particular board composition or behavior that is advantageous for
one corporation may prove inappropriate or even detrimental in another
Heracleous, (2001). There is need to identify the control variables and gaps in
understanding how the board can impact on firm performance.
The particular contingencies that will impact on board roles corporate
performance would include organizational size Daily and Dalton, (1992), Dalton
et al,. (1999), diversity Siciliano, (1996), management experience CoulsonThomas,(1993) industry turbulence, industry lifecycle, and firm lifecycle Johnson,
(1997). It is these contingencies that moderate the relationship between board
roles and board effectiveness. Thus the current study includes external and
internal contingencies to moderate the relationship between board role execution
and board effectiveness.
This study will use management experience, University turbulence, University
lifecycle as contingencies that will impact on board roles and corporate
performance.
Board effectiveness
Individuals perceive effectiveness partially or in different ways. The social
constructionists conception, for instance, holds that there only judgments of
effectiveness, thus effectiveness are judgmental (Herman et al., 1997). According
to Triscott, (2004) effectiveness is about doing the right things to achieve the
results. In terms of measurement, Novick (1997) suggests that the current
approaches measure elements associated with effectiveness rather than
effectiveness rather than effectiveness itself. Board effectiveness can be
conceptualized as a function of overall contribution of the board to the
organization performance, standard of support provided by the organization,
individual contribution of directors to organization performance, board dynamics,
Board performance evaluation and review Van der Walt and Ingley, (2001). Close
inspection of earlier literature revealed that board effectiveness is almost based on
individual experience Jackson & Holland, (1998). According to Higgs &
Dulewicz (1998), the issue of measuring team outcomes is a difficult one and the
literature abounds with debates around team performance, which mirror those
surrounding organizational performance. However, while there are various
definitions of group effectiveness, Huat & David (2001) argue that board
performance has been measured along the dimension of the boards ability to
perform its functions. Indeed, an earlier study by Forbes & Daniel (1999) defined
board effectiveness as the boards ability to perform its control and service tasks
effectively. From empirical perspective, Bardwaji & Vuyyuri (2003) found that

10

overall judgments by respondents of board effectiveness were strongly related to

how effectively the boards were judged to perform various functions.
Basing on the above literature, it fairly holds that board performance has been
largely defined in terms of roles played by the BODs. These roles have been
identified from various perspectives including; agency, service, resource
dependency, legal and strategic theories. However, some of these perspectives are
interrelated, for instance resource dependency, service and strategy, agency and
legal. Using these perspectives, the following roles have been identified;
Skills and knowledge
Presence and use of skills and knowledge has been identified as another important
dimension of board effectiveness. Board members must have the right mix of
skills and knowledge. For instance, they should possess both functional
knowledge in traditional areas of business such as accounting, finance, legal or
marketing as well as industry specific knowledge that will enable members to
truly understand specific company issues and challenges. In addition, board
members must have enough general knowledge to provide good input on all
topics of discussion, ask questions of all special interest until they are comfortable
enough to cast votes Espstein et al, (2002). Thus, for boards to work effectively,
Nicholson & Geoffrey (2004) emphasize that board members must possess
necessary knowledge and skills, given the unique nature of their tasks. Similarly,
for a board to effectively perform the supervisory role, it should be composed in a
manner that enhances the presence of skills and knowledge Namisi, (2002).
Committees
Significant research effort has focused on the impact of committees, Klein ,
(1989), most notably the audit committee Klein, (2002), remuneration committee
Conyon and peak, ( 1989) and nominating committee Vafeas, (1999) with
findings that there is a link between the presence of board committees and board
effectiveness. A committee is a group of members to whom some specific role has
been delegated by a full board. Committees can be used to gather, review and
summarize information and report back to the full board for decision or can be
delegated specific decision making powers, Gavin and Geoffrey, (2004).
Delegation
The final function that a board needs to consider is its duty with respect to
delegation authority. Given the complexity of the business environment, it is
impossible for the board to be the sole decision- making body in the company.
Instead, each board needs to work on developing an appropriate method and level
of delegation of authority. Obviously this will again vary with the context facing
the board but, in all circumstances, the board needs to clearly articulate and
document the delegations it makes Gavin and Geoffrey, (2004).
Risk management
Risk management includes the identification of all significant risks faced by the
company and ensuring that appropriate policies are in place to moderate the
impact of these risks Klein, (2004). This study will focus on council committees
like appointments board committee, staff welfare committee, students welfare
committee and Finance tender and general purposes committee and the roles

11

delegated by council to the committees. Appropriate policies put in place to

moderate the impact of risks in public Public Universities will be considered.
Financial performance
Measuring firm performance using accounting ratios is common in the Corporate
Governance literature Demaetz and Lehn, (1985), Ang et al, 2000), in particular,
return on capital employed, return on assets, and return on equity. Similarly,
economic value added can be as an alternative to purely accounting- based
methods to determine shareholder value by evaluating the profitability of a firm
after the total cost of capital, both debt and equity are taken into account
(Copeland et al, 1995). Other measures of financial performance in profit making
organizations are Capital adequacy, Asset quality, Management, Earnings and
Liquidity which are commonly known as CAMEL Model.
The current study on Public Universities as non profit making organizations will
measure Financial Performance in terms of Actual revenue/budgeted revenue ratio
(Revenue Collection Ratio), Actual Expenditure/budgeted expenditure ratio
(Expenditure Ratio) and Actual revenue/ actual expenditure (Efficiency -Value for
money ratio).
Relationship between Corporate Governance and board roles
Higgs D. (2003),Overall leadership and control of the nonprofit entity fits within
an overall system of management, which includes the Board and stakeholders, the
relationship between the board and the stakeholders, the chief executive, (any)
other policy or consultative council of leadership stature, and operating managers
or functional heads within the entity. The Cadbury Report (1992) embraces the
interests of the stakeholders of the Organisation and the interests of external
bodies with who the Organisation is in a strategic funding or policy relationship.
McConville, C. (2001), Company law leads to the conclusion that the board is
responsible for regulating the status of the Company. Intuitive knowledge and
commonsense of lay board members would say that the board must regulate the
affairs of the NPO entity to which the board has been appointed.
Relationship between board roles and board effectiveness
Board effectiveness depends on the execution of a set of four board roles, namely
monitoring and controlling, strategizing, providing advice and counsel and
providing access to resources; and firm performance positively impacted on board
effectiveness Gavin and Geoffrey, (2004). Cornforth Chris (2001), carried out a
survey of charity boards in England and Wales and examined the what influence
board inputs, structures and processes have on Board Effectiveness. The findings
suggested that board inputs and three process variables are important in
explaining board effectiveness, namely: board members have the time, skills and
experience to do the job; clear Board Roles and responsibilities; the board and
management share a common vision of how to achieve their goals; and the board
and management periodically review how they work together.
Relationship between board effectiveness and financial performance
Rutagi, (1997) defines financial performance as to how well an organization is
performing. Other researchers define performance of the organization as the
extent to which an organization achieves its intended outcome, Namisi,
(2002).The general assumption among both researchers and practitioners is that

12

effective boards lead to effective organization. From either an internal long-term

profitability or external shareholder perspective, there is an indication that good
boards may be able to add value to the organization, Epstein et al., (2003).
Herman and Renz, (2000) asserts that little research on the relationship between
board effectiveness and organizational performance has been done. There was a
positive relationship between board effectiveness and organizational performance
Zahra, (1991). Masibo, (2005) and Namisi, (2002) revealed results that are
consistent with earlier studies above that there was a positive relationship between
board effectiveness and firm performance in listed profit making firms in Uganda.
In non profit making organizations there were similar results that a positive
relationship existed between board effectiveness and organizational performance
Jackson & Holland, (1998) and Herman & Renz , (2000).
Relationship between Corporate Governance and financial performance
Two broadly defined theories co- exist in the corporate governance literature. One
stresses the discipline of the market, claiming that threat of hostile takeovers and
leveraged buyouts in firms was sufficient to ensure full efficiency. Where
managers neglect to invest in those projects that add value to the firm and its
shareholders but divert recourses to their own benefit, the financial markets act to
restore good governance. A number of mechanisms have been suggested, such as
removing senior managers in poorly performing firms Palepu, (1986), Morch,
Shleifer and Vishney, 1988, 1989); demanding cash flow payments in the form of
debt service Jensen, 1986); and linking executive compensation to performance,
including equity and options Jensen, (1986). Matama, (2005) in the study of
Corporate Governance and financial performance on selected commercial banks,
obtained a positive relationship between Corporate Governance and financial
performance. Masibo, (2005) researched on Board Governance and firm
performance of selected state owned corporations and in listed organizations on
Uganda Securities Exchange, obtained a positive direct and indirect link between
Board Governance and Firm Performance through Board Effectiveness.
Piesses, (2005), carried out empirical research on Corporate Governance and firm
performance in an international perspective and obtained conflicting results on the
link between Corporate Governance and Firm performance.
Conclusion
Many researches have been carried out on profit making organization from within
and without on Governance and firm performance, little has been done on non
profit making organizations. The non profit sector is becoming increasingly
important in United Kingdom, for example in the Education and health sectors. In
many cases they compete with profit making organizations. This has interesting
implications for Corporate Governance and relative performance out comes
Piesse (1999). Just like Uganda the Education and health sectors are becoming
increasingly important. Few researchers have researched on a direct link between
Corporate Governance and financial performance. This therefore called for an
investigation into the relationship between Corporate Governance and financial
performance with the inclusion of a contingence variable as a moderating variable
in non profit making organizations in Uganda, with the focus on public
Universities.

13

METHODOLOGY
Research design
The Research study used cross sectional and analytical research designs. These
research designs were used to collect a snap shot of data and analysis of the
relationships between study variables.
Study population
The study population size of 221 constituted 91 council and 130 senate members
of 4 public Universities namely; Makerere University,, Mbarara University of
Science and Technology, Kyambogo University and Gulu University. The unit of
analysis was Universities.
Sample size and sampling design
A sample size of 142 council members and senate members was used as
determined from Krejcie and Morgan (1970) table.
Proportionate stratified and simple random sampling designs was used to select
the sample of 142 members as shown in Table 1 below.
Table 1: Population and sample size
Institution
Population size
Sample size
Council
24
22
24
21
91

Senate
65
19
19
27
130

Council
15
14
15
14
58

Senate
42
12
12
18
84

Makerere University
Kyambogo University
MUST
Gulu
TOTAL
Source: Secondary Data
Sources of data
The two sources of data were primary and secondary data. Primary data was
obtained from primary source on Corporate Governance, board roles, board
effectiveness and contingency. Secondary source provided secondary data on
financial reports and number of council and senate members.
Data collection methods
Questionnaires and abstraction methods were used in collecting data. Semi
structured questionnaires were used to collect primary data directly from the field.
Abstraction method was used to collect secondary data from financial reports.
Measurement of study variables
The independent variable which was corporate governance had to be measured in
terms of board structure / size and decision making. Board roles were measured in
terms of monitoring and control, access to resources, strategy and advice and
counsel. Board effectiveness was measured in terms of committees, risk
management, delegation, skills and knowledge. Contingency was measured in
terms of management experience (Coulson Thomas, (1993), institutional
turbulence, institutional life cycle (Johnson, (1997). All indicators were subjected
to a four point likert scale of strongly agree, agree, disagree, and strongly
disagree. Financial performance as dependent variable was measured in terms of
the revenue collection performance ratio of actual revenue over budgeted revenue.
Expenditure performance ratio of actual expenditure over budgeted expenditure.
14

Value for money was measured as a ratio of actual revenue over actual
expenditure (efficiency).
Validity and reliability tests
Content validity index (CVI) was used to measure the relevancy of the questions
used to measure the study variables of Corporate governance, board roles,
contingency, and board effectiveness. A four point scale of relevant, quite
relevant, somewhat relevant and not relevant was used to collect the responses
from two experts in the area of study. A proportion of relevant and quite relevant
was computed to get the CVIs of the two experts. The CVIs were 0.6974 and
0.5789. Since the questions were relevant to the study variables.
The reliability tests performed using cronbach alpha coefficient to determine the
internal consistency of the likert scales used to measure the study variables
indicated alpha coefficients for all variables above 0.60.
Data processing and analysis
Primary and secondary data was coded, edited and analyzed using the Statistical
Package for Social Sciences (SPSS) version 10. Descriptive statistics and chisquare test was used to examine Corporate Governance, board roles and
contingence. Variance analysis was performed to examine the level of financial
performance. Spearman correlation was used to measure the relationship between
Corporate Governance, board roles, board effectiveness and performance.
Multiple regression was used to predict financial performance of public
Universities in Uganda.
The limitations of the study
The study involved council and senate members of the four public Universities
with busy schedules. Several appointments had to be made by the researcher in
collecting the questionnaires. With the permission of academic registrars,
University bursars and University secretaries of the four public Universities over
70 % of the questionnaires were collected which took a period of over 3 months.
The researcher was patient enough in this regard. The combined effort of the
researcher and the research assistants enabled the collection of over 70% of the
field questionnaires from the four public Universities in Uganda. The study was
limited financially and time constrained due to the wide spread nature of public
Universities. However the researcher used the limited resources available and
with research Assistants helping in collection of data. Financial reports from some
institutions were not easily accessible due their sensitivity. Therefore the
researcher had to write specific letters emphasizing confidentiality of the data
obtained to the University Bursars to allow access to the financial reports.
Despite the above limitations, the researcher collected sufficient data for the study
and was able to come up with results that answered the study research objectives.
Findings of the study
Factor analysis
Factor analysis using principle component analysis and varimax rotation methods
extracted components with eigen values greater than 1 that measured board roles,
contingency and board effectiveness. Only items with correlation coefficients
greater than or equal to 0.3 were retained.
Board roles

15

Four components or factors constituting 77% variance of board roles were

extracted from 27 items. The four factors include; strategizing (19.608%), access
to resources (19.432%) 3) monitoring and control (18.938%) and advices and
counsel (18.568%). This confirms what Gavin and Geoffrey, (2004) used as
measures of board roles.
Board effectiveness
Three factors were extracted contributing 57% of the variance of board
effectiveness. The three factors include; skills and knowledge (32.693%),)
Delegation (12.600%), and Risk management (11.718%). This is in conformity
with Gavin and Geoffrey, (2004) study that used skills and knowledge, delegation
and risk management indicators to measure board effectiveness.
Contingence
Three factors constituting 61.44% of total variance of contingence variable were
extracted from 33 items. The items include; 1) Institutional turbulence
(27.326%) , 2) Institutional lifecycle (23.477%), 3) Management experience
(10.636%). This is in conformity with Gavin and Geoffrey, (2004) model that
used institutional turbulence, institutional lifecycle and management experience
as measures of contingence.
Relationship between Study Variables
Spearman correlation coefficient was used to determine the degree of relationship
between the study variables as shown in the table 2 below.
Table 2: Spearmans zero order correlation matrix
1

BOARD SIZE (1)

1.000

POLICY & DECISION

MAKING (2)

-.155

1.000

BOARDROLES (3)

.211*

.358**

1.000

BOARD FFECTIVENESS
(4)

.094

.344**

.455**

1.000

-.193

.185

.139

.225*

1.000

REVENUE
PERFORMANCE (6)

-.337**

.321*

.113

.113

.240*

1.000

EXPENDITURE
PERFORMANCE (7)

-.337**

.332**

.113

.113

.240*

1.000**

1.000

EFFICIENCY (8)

-.928**

.308*

.324*

.099

.341**

-.064

-.064

1.000

FINANCIAL
PERFORMANCE (9)

-.337**

.316*

.113

.411**

.324*

1.000**

1.000**

-.064

CONTIGENCY (5)

*. Correlation is significant at the .05 level (2-tailed).

**. Correlation is significant at the .01 level (2-tailed).

Relationship between Corporate Governance and board roles.

16

1.000

There was a significant positive relationship between Corporate Governance and

board roles (r= 0.212, P-value < 0.05, r = 0.358, P-value < 0.01) respectively in
terms of board size and policy and decision making constructs of Corporate
Governance as shown in table 2 above. This implies that good Corporate
Governance in terms of board size, policy and decision making enhances on the
board roles by improving on monitoring and control, access to resources,
strategizing, advice and counsel.
Relationship between board roles and board effectiveness.
Results in table 2 above indicate a significant positive relationship between board
roles and board effectiveness (r = 0.455, P-value < 0.01). This implies that well
defined and streamlined board roles improved on the board effectiveness in terms
of knowledge and skills, committees, delegation and risk management.
Relationship between board roles and board effectiveness while controlling
for contingence.
The partial correlation coefficient results indicated that there was a significant
positive relationship between board roles and board effectiveness while
controlling for contingence (r = 0.578, P-value < 0.01). This implies that
contingency plays a positive role in moderating the link between board roles and
board effectiveness.
Relationship between Corporate Governance and financial performance.
The Spearman correlation coefficient table 2 indicates the following relationships;
There was a significant negative relationship between board size and financial
performance (r = -0.337, P-value < 0.01). This implies that board size reduces on
the financial performance. Policy and decision making had a significant positive
relationship with financial performance (r = 0.316, P-value < 0.05). This implies
that policy and decision making as measure of Corporate Governance enhanced
on financial performance of public Universities.
There was a positive relationship between policy and decision making and
revenue performance, expenditure performance and efficiency (value for money)
(r = 0.321, P-value < 0.05, r= 0.332, p-value<0.01, r= 0.308, p-value<0.05).
Proper policies and decision making, increased revenue performance, expenditure
performance and efficiency (value for money).There was a significant negative
relationship between board size and revenue performance, expenditure
performance and efficiency (value for money) (r = -0.337, p-value < 0.01, r =
-0.337, P-value < 0.01, -0.928, p-value<0.01). This implied that size of boards
reduced on the revenue, expenditure and efficiency (value for money) of public
Universities.
Relationship between Corporate Governance, board roles, board
effectiveness and financial performance.
Multiple regression analysis was used to predict the financial performance of
public Universities as shown in the regression model table 3 below;
Table 3: Regression model for Corporate Governance, board roles,
contingence, board effectiveness and financial performance.
Model
Unstandardized
Standardized
coefficients
coefficients
B
Std . Error Beta
T
Sig

17

Constant
1.692
0.213
2.324
0.000
Board size
-0.456 0.165
-0.472
-4.054 0.000
Board roles
0.455
0.233
0.352
3.167
0.000
Board
0.651
0.057
0.543
4.498
0.000
effectiveness
Policy & decision 0.420
0.431
0.363
3.267
0.000
making
Contingency
0.562
0.213
0.431
3.687
0.000
R- Square =0.490, Adjusted R- square = 0.484, F= 4.400, Sig = 0.000
There was a linear relationship between corporate Governance, board roles,
contingency, board effectiveness with financial performance (F = 4.400, Sig =
0.000).
Board size, policy and decision, board roles, contingency and board effectiveness
explained 48.4% of financial performance of public Universities.
Board effectiveness (Beta = 0.543) explained more to the financial performance,
followed by contingence (Beta = 0.431), policy and decision making (Beta =
0.363), and board roles (Beta = 0.352). This implied that increase in board
effectiveness, management of contingences, proper policies and decisions and
board roles led to increase in financial performance.
Board size however, negatively impacted on the financial performance (Beta =
-0.472). This implied that increase in the size of council and senate led to the
reduction of in financial performance of public Universities.
Removing the contingency variable in the regression model, indicated a reduction
in the financial performance of public Universities as only 45.6% of the total
variance of the financial performance is explained as shown in the table 4.12
below. Board size continued to impact negatively on firm performance
(Beta = -0.427) while board effectiveness (Beta = 0.465), policy and decision
making (Beta = 0.336) and board roles (Beta = 0.314) explained positively the
financial performance of public Universities.
Table 4: A Regression model for Corporate Governance, board roles, board
effectiveness and financial performance.
Model

Unstandardized
Standardized
coefficients
coefficients
T
B
Std. Error Beta
Constant
0.562
0.142
0.987
Board size
-0.436 0.021
-0.427
-3.054
Board roles
0.396
0.450
0.314
1.917
Board effectiveness 0.496
0.165
0.465
3.550
Policy & decision 0.420
0.312
0.336
2.727
making
R- Square = 0.469, Adjusted R- Square = 0.456, F= 3.865, Sig = 0.000

18

Sig
0.000
0.000
0.000
0.000
0.000

Table 5: Budgeted and actual revenue and expenditure for the financial Year
2004/05
University
Kyambogo
Gulu
MUK
Mbarara

Budgeted
Revenue
21,743,298,750
7,331,560,811
54,899,764,000
13,452,879,550

Actual
Revenue
20,345,236,770
6,050,535,230
54,658,205,038
12,456,743,520

Budgeted
Expenditure
21,743,298,750
7,331,560,811
54,899,764,000
13,452,879,550

Actual
Expenditure
22,345,632,123
6,567,254,246
56,933,077,000
12,865,290,340

Variance
-2,000,395,353
-516,719,016
-2,274,871,962
-408,546,820

Source: Secondary Data

From the above table 5 all the four public Universities had been spending more
funds than actual revenues into deficits.
DISCUSSION, CONCLUSION AND RECOMMENDATIONS
Discussion of findings
Relationship between Corporate Governance and board roles.
Significant positive relationship was obtained between Corporate Governance and
board roles.
Policy and decision making, board size had significant positive effect on board
roles. Board size, policy and decision making positively influence the roles played
by board members (council and senate). The finding is in line with Masibo,
(2005) whose findings were that good board governance positively enhances on
monitoring and strategy. The positive correlations imply that council and senate
members contribute positively to the monitoring and strategic issues of the
University. This is consistent with Bonn et al., (2004).
Corporate Governance results indicated a significant positive perception across
the four public Universities which implied that council and senate in the four
public Universities are involved in policy and decision.
Council and senate members had no significant differences in perceptions with
regard to Board roles across the four public Universities. Which implied that the
roles played by council and senate members in the four public Universities is
similar.
Relationship between board roles and board effectiveness
Board Roles had a significant positive relationship with board effectiveness.
There were no significant differences in board effectiveness across the four Public
Universities. This implied that council and senate members had applied similar
skills and knowledge, constituted similar committees to perform various
functions, delegated roles, formulated measures in the management of risks.
Board roles had a significant positive relationship with board effectiveness. This
implied that Monitoring and Control, Access to Resources by board members,
appropriate strategies , advices and counsel improved on the board effectiveness
in terms of the skills and knowledge applied by board members, committees

19

constituted by council and senate, delegation of roles and measures to manage

risk in the four public Universities.
This is in line with Hung, (1998), Johnson et al.,(1996), Lipton and Lorsch,
(1992), who assert that Board effectiveness occurs via the execution of roles set.
Black, (1992) revealed that the strategizing role increases performance pressures
being applied by institutional stakeholders. By acting in an open, professional and
ethical manner in their dealings with people outside the organization, board
members raise the profile of the institution and enhance its reputation Gavin and
Geoffrey, (2004). Gavin and Geoffrey, (2004) widely accepted that advice and
counsel is important to Top management in serving the interests of the institution
and this was supported by Lorsch and Maclever, (1989).
Relationship between board roles, contingency and board effectiveness
There was a significant positive relationship between board roles and board
effectiveness while controlling for contingence.
There was a significant positive relationship between board roles and board
effectiveness while controlling for contingence. Contingency in terms of
management experience, controlled institutional turbulence and institutional life
cycle played a positive role in improving the relationship between board roles and
board effectiveness. This is in line with Heracleous, (2001), Donalson and Davis,
(1994), Johnson et al., (1996) who explicitly affirmed that there is need to
incorporate a contingency perspective while undertaking various roles and the
need to identify the control variables and gaps in improving institutional
performance. Furthermore the results were in conformity with Sisiliano,(1996),
Coulson Thomas, (1993) and Johnson, (1997).
Relationship between board effectiveness and financial performance
There was a significant positive relationship between board effectiveness and firm
performance. This implied that effective boards positively impact on the financial
performance of the public Universities. Board effectiveness in terms of proper
application of skills and knowledge, appropriate committees, delegation of roles
and management of risk enhance on the financial performance of public
Universities. The findings are consistent with Masibo, (2005) where a significant
positive relationship between board effectiveness and firm performance was
obtained. Brown, (2004) results revealed that better performance by boards was
associated with good performance of organizations. Further the results are
consistent with Jackson and Holland, (1998) whose findings showed that
improvement in board performance represent an important point of leverage in
improving organizational performance.
A study by Namisi, (2005) revealed that board effectiveness was positively
correlated with performance of financial institutions of Uganda. Kale, (2002)
revealed that effective teams lead to improvement in organizational performance.
Van der Walt and Ingley, (2001) revealed that board effectiveness contributes to
the organizational performance.
Epstein et al., (2003) noted that from either an internal long-term profitability or
external shareholder perspective, there is an indication that good boards add value
to the organization. Further Zahra, (1991) obtained a positive relationship
between board effectiveness and organizational performance. Herman and Renz,

20

(2000) results were similar to all the above that a positive relationship existed
between board effectiveness and organizational performance.
Relationship between Corporate Governance and financial performance
There was a significant relationship between Corporate Governance and financial
performance of public Universities. (Results are consistent with earlier ones
obtained by Masibo, (2005) whose results showed a relationship between Board
Governance and firm performance. Results are also in agreement with Mckinsey
quarterly survey Mark (2000), that a link existed. Furthermore Matama, (2005)
obtained a positive relationship between Corporate Governance and financial
performance of selected commercial banks.
Relationship between Corporate Governance, board roles, contingence,
board effectiveness and financial performance
Financial performance was significantly explained by Corporate Governance,
board roles, contingence and board effectiveness.
The multiple regression model indicated that 48.4% of the financial performance
of public Universities was contributed by Corporate governance, board roles,
contingence and board effectiveness. Board effectiveness contributed more to
financial performance followed by contingence, policy and decision making and
board roles. However board size had a negative effect on the financial
performance of public Universities. Results are also consistent with Bonn et al.,
(2004) whose findings showed a negative relationship between board size and
performance of Japanese firms. Results above are consistent with Masibo, (2005)
who established that good Governance, board effectiveness and board process
positively explained firm performance and also found out that increase in board
size reduces on the firm performance. Furthermore, the results are in line with
Gavin and Geoffrey, (2004) who established that corporate governance, board
roles, contingency and board effectiveness led to improved firm performance.
Conclusions
Findings on the relationship between Corporate Governance variables and board
roles, indicated significant positive relationship. Board size, policy and decision
making as aspects of Corporate Governance had a positive effect on the board
role. The public Universities had no optimal number of members on senate and
council that were monitoring, controlling, strategizing, providing advice and
counsel.
Policy and decision making in public Universities is important in contributing to
financial performance.
Board roles significantly influenced board effectiveness and this meant that board
roles were important in determining the effectiveness of boards. This means that
for council and senate to be effective they must pay attention to their roles.
Contingency in terms of management experience, institutional turbulence and
institutional lifecycle significantly and positively influenced the impact on board
roles and board effectiveness. Public Universities therefore require use of
contingency measures to improve on the effectiveness of council and senate.
The size of council and senate of public Universities significantly reduced on the
financial performance. This means that public Universities have board sizes that

21

attract high costs of maintaining boards in terms of sitting allowances, mileage

and retainer fees.
The conclusion drawn from the findings between board effectiveness and
financial performance is that boards (council and senate) do contribute to
performance of public Universities they direct and control. This is possible
through performing board roles and managing contingence.
Lastly Corporate Governance positively contributes to financial performance of
public Universities through board roles, contingence and board effectiveness.

22

Recommendations
The study on corporate governance and financial performance of public
Universities in Uganda was carried out. In line with the findings and conclusions
of the study the following were recommended;
From the findings on the effect of board size on financial performance which was
negative and for council and senate to be effective in performing their roles, there
is need to review the membership of council and senate to avoid having large
boards.
On the effect of policy and decision making on board roles, it is recommended
that council and senate should set up policies that can stand the test of time
whereby different view points, ideas and opinions from all the stakeholders are
considered.
Council and Senate should avoid rubberstamping of top managements
recommendations on policy issues. Instead thorough discussions on the
recommendations through sub-committees of council should be made.
Recommendations on board roles include;
Council and senate should set measurable objectives that permit monitoring and
control of public University performance this can be achieved through discussing
thoroughly their strategic plans.
Council members of the University must formerly evaluate the performance of the
top University executives. The students, academic and administrative staff should
evaluate the performance of the University management on the set objectives
according to the strategic plan.
Include both the internal and external board members on the intranets to enable
them have access to information within the University. Allow them access to
online and physical library resources within the University.
Boards should be given improved facilitation in form of retainer and sitting and
mileage allowances.
They should provide frequent advices and counsel to the top management of the
University.
Council and senate should be involved at strategic planning process of the
University to improve on their roles as board members which are in line with the
mission and vision of the University.
Council and senate must ensure that the Universities meet their legal obligations
like remittance of staff benefits to NSSF, NIC.
Council and senate should provide advice and counsel to top management of the
Universities on critical issues from an informed point of view if they are to
perform their roles effectively in order to have a significant impact on the
University performance. Universities should consider formation of advisory
boards independent of council to complement on the role of advice and counsel.
Contingence as an important moderating factor of board roles and board
effectiveness should be managed as follows;
To manage institutional turbulence like employee strikes or unrest, council and
senate should understand and make effective polices and decisions regarding
employee benefits and retirement plans. Good policies on terminal, medical and
long service award. At the time of appointment of each employee one should have

23

all policies of the University as part of the appointment package which is not the
case now. Council and senate should put in place incentive schemes that provide
significant rewards for outstanding performance, for instance rewards to best
performing employee, students and provision of interest free loans to staff.
Council should appoint employees at top management level who posses vast
management experience.
Recommendations on board effectiveness;
Council should be constituted by members with required skills and knowledge in
order to provide technical expertise and also be able to direct and control the
public Universities. Performance appraisal tools should be designed to evaluate
annually the performance of council and senate members.
For effective performance of council there is need to delegate to its sub
committees some duties for instance appointments of employees to appointments
board, disciplinary to disciplinary sub committee and issues of benefits to staff
welfare committee and students welfare committee.
Council should have in place risk management procedures that encompass
financial, operational and environmental risk.
Suggested Areas of further research
The current study was conducted on public Universities in Uganda which are
funded by government, therefore there is need for a similar study to be carried out
in private Universities for comparison purposes.
A similar study could be carried out in Anglican church of Uganda, Catholic
church of Uganda and Uganda Muslim supreme council in Uganda since they
have governing boards that manage their income generating projects.
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