Board Assurance and Financial Performance of Selected Saccos in Kiruhura District, Uganda

Abstract

Board assurance is the term used to describe the board's degree of trust in the organization's capacity for efficient risk management. Among SACCOs in Uganda, board assurance and financial performance are important ideas. The financial sector in Uganda has been characterized by investor activity, hostile takeovers, poor corporate governance, weak boards of directors, and protection of minority shareholders. Several banks and other financial institutions have failed to operate despite Bank Uganda's multiple interventions, necessitating regulatory action to maintain the stability of the financial system. This study's goal was to examine how board assurance affected the financial performance of a subset of SACCOs in Uganda's Kiruhura District. This study used both quantitative and qualitative research methods, utilizing a cross-sectional survey research design. At a 95% confidence level or 0.05 error rate, a population of 342 individuals was used. The sample size consisted of 184 respondents, staff members, and members of the six SACCOs that were registered in the Kiruhura area of Uganda as of January 2023. There were two stages to the data collection for analysis. First, SPSS version 20.0 was used to conduct the preliminary data analysis and descriptive statistics on the respondents.In the second phase, structural equation modeling (SEM) was used to evaluate and investigate the structural relationships between the variables in the proposed conceptual model. These statistics included multicollinearity, mean and standard deviation, outliers and extreme values, and missing data. SEM was implemented using Jaffrey's Amazing Statistical Program (JASP) version 0.17.2.0. The study's conclusion supported Ha1 by showing that board assurance (BoA) (=0.343**) significantly improved the financial management of savings and credit co-operative societies (SACCOs) in Uganda. According to the study's findings, SACCO would perform better financially the more its board took responsibility for the company's decisions and told stakeholders about them. The study recommends that; board of directors should be more effective in ensuring that they communicate the decisions clearly and appropriately so that SACCO’s maximize shareholders wealth.