Corporate Governance Problems of Savings, Credit and Cooperative Societies

Abstract

The study discusses the corporate governance problems of Savings, Credit and Cooperative Societies (SACCOs). It examines both the corporate governance theories and conflicts of governance associated with SACCOs. Problems frequently occur in SACCOs due to one or more of the following reasons; lack of clear and proper rules separating management from decision making, unqualified personnel in management, inadequate managerial competitiveness, failure of membership and boards to exercise fiduciary responsibility and the one member one vote (OMOV) system. Several measures against the SACCO governance problems such as having clear rules in the SACCO bylaws and identifying who are the stakeholders dominating the SACCO should help to ensure good governance.