TITLE:
Diversity of Board Practices in Sub-Saharan Economies: Evidence from Insurance Companies in Uganda
AUTHORS:
Hannington Businge, Vincent N. Machuki, Evans Aosa, James M. Njihia
KEYWORDS:
Board Practices, Board Appointments, Insurance Companies, Uganda
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.13 No.8,
August
15,
2023
ABSTRACT: The study aimed at establishing the diversity of
board practices of Insurance companies in Uganda. Board practices are
conceptualized as; appointment of directors, inducting board members, planning
board business, board structure and composition, board roles and
responsibilities, board development, board meeting optimization, board compensation,
board member retirement, liability protection and board evaluation. The study
reviews evidence against the hypothesis that there is no statistically
significant difference in the manifestation of diversity of board practices
among Insurance companies in Uganda. The hypothesis was tested on an effective
sample of 108 board chairpersons of companies regulated by insurance regulatory
authority. The study was descriptive cross-sectional survey on a univariate
variable of board practices. The data was analyzed using descriptive
statistics. The findings of the study indicated that the studied board
practices were all statistically significant. The dimensions with the highest
manifestation were board structure and composition, board meeting optimization
then roles and responsibilities. Inducting board members, board development,
board evaluation and appointment of directors fell in the moderate category.
Whereas, board compensation, board member retirement and liability protection
results projected the least manifestation. The Null hypothesis was rejected
(Mean = 3.42, CV = 42.85, t = 11.84436, p = 0.000 0.05).
The findings imply that management of insurance companies must attach
importance to all board practices since they are a cycle as a gesture for good
corporate governance practice. Going forward managers of insurance companies in
Uganda by borrowing a leaf from the study findings realize the importance of a
clear compensation policy for board members, a clear retirement policy of board
members and a clear policy on director’s liability protection. The practice
will attract committed, experienced and skilled board members to serve on the
boards of insurance companies in Uganda. This study underlined the need for the
Ugandan government through the regulator IRA to address the issue of unclear
policy, by developing comprehensive board practices and a comprehensive
corporate governance framework to provide a robust institutional framework governing
appointment of directors, inducting board members, board structure and
composition, roles and responsibilities, board development, planning board
business, board meeting optimization, board compensation, liability protection,
board member retirement, board evaluation. It is further recommended that companies
should internally have a board development committee.