An assessment of the role of board committees' corporate governance practices in a development financial institution: Case of African Development Bank Group (2000 - 2011)

Abstract

The study sought to assess the role of board committees on corporate governance in development financial institutions with particular reference to The African Development Bank Group. The researcher conducted an assessment of the institution’s board committees’ terms of references, compositions, the level and quality of contribution and involvement to the organization’s corporate governance practices in addition to their everyday practices in the institution. The literature reviewed which relates to board committee showed that sub- committees are essential in corporate governance issues of a development financial institution.The review also showed that board committees play a pivotal role to the main board in terms of technical and more specialized issues about the organization. Samples were taken from target population and further divided into stratus where a random selection of the final sample was done using the random selection approach.Data was collected through administering of questionnaires to board members, senior and middle management within the organization as well as from secondary data sources. A total of 70 participants from within the organization across Africa and at various managerial levels formed the target population. The researcher concluded that the institution has board sub committees with varying terms of references that play pivotal role to the full board through deliberations on more technical issues on company activities and daily operations. Further, the bank has a corporate structure that’s seeks to accommodate various committees within the organization. As a result, the research recommends that the main board should rely more on board committees since they have more technical capacity. In addition, more board committees should be convened since the institute is growing with more demanding issues. The researcher also recommended that the operations committee should have representations on a subcommittee to take into account detailed needs of members states.