Determinants of Board Structure in Microfinance Institutions: Evidence from East Africa. (December 2013)

• Record Type: Journal Article
• Authors: Mori, Neema; Randøy, Trond; Golesorkhi, Sougand
• Is Part Of: Journal of emerging market finance. Volume 12:Number 3(2013)
• Page Start: 323
• Page End: 365
• Publication Date: 2013-12
• Subjects: Board structure -- microfinance institutions -- East Africa -- corporate governance; Banks and banking -- Developing countries -- Periodicals; Financial institutions -- Developing countries -- Periodicals; Securities -- Developing countries -- Periodicals; 332.09172405
• DOI: 10.1177/0972652713512916
• Languages: English
• ISSNs: 0972-6527

Abstract

This study investigates the association between the unique characteristics of microfinance institutions and board structure. The agency and resource dependence theories provided theoretical guidance for this study. Using a panel dataset of 63 microfinance institutions in East Africa, we found that the presence of regulations and international influence is associated with larger boards, while the presence of founders is associated with small boards and less board independence. There is a higher level of board gender diversity in microfinance institutions managed by founders. There is greater diversity of nationalities in microfinance institutions that are internationally influenced. The implications for practice and theory from this study are further discussed. JEL Classification: G21, G34