A Comparative Study of Corporate Governance and Firm Performance in StateOwned Commercial Banks and Utility Companies in Sierra Leone

Abstract

Historically, state-owned commercial banks (SOCBs) in Sierra Leone have shown relatively high performance than State-Owned Utility Companies (SOUCs) in the country. While several issues may have contributed to such low performance by SOUCs, this study aims to explore whether and how (if any) compliance with corporate governance practices (based on CACG Code) varies between the high-performing SOCBs and low-performing SOUCs, and whether this variation of compliance causes performance differences. A cross-sectional research design with quantitative approach was adopted. A survey was conducted in two SOCBs and two SOUCs in 2025. Apart from questions on respondent and organizational backgrounds, a self-completion questionnaire comprising 66 questions (governance – 39 & performance -27) was successfully completed and returned by 144 participants. Further, a checklist of 19 items was constructed based on the Acts of Parliament and scored against the CACG Code provisions by the researcher. Using SPSS and Excel Programs, data was analyzed using descriptive (percentages, and mean percentages) and inferential (Pearson’s correlation, and simple linear regression) statistics. The Overall Compliance Index of SOCBs is 68% while SOUCs has an index of 45%. The correlation coefficients (r = 0.996 and r = 0.998) indicate a very strong positive linear relationship between governance and performance. Also, the regression results (adjusted r2 = 0.988, df = 3; p < 0.01) indicate a strong association between corporate governance and firm performance. The study shows that SOUCs’ rate of corporate governance compliance is weaker than SOCBs in most criteria set by the CACG Code, which might have caused low financial performance by SOUCs (40%) and high financial performance by SOCBs (64%). The findings of the study have practical and policy related implications to improve the performance of SOUCs in Sierra Leone. Abstract: Historically, state-owned commercial banks (SOCBs) in Sierra Leone have shown relatively high performance than State-Owned Utility Companies (SOUCs) in the country. While several issues may have contributed to such low performance by SOUCs, this study aims to explore whether and how (if any) compliance with corporate governance practices (based on CACG Code) varies between the high-performing SOCBs and low-performing SOUCs, and whether this variation of compliance causes performance differences. A cross-sectional research design with quantitative approach was adopted. A survey was conducted in two SOCBs and two SOUCs in 2025. Apart from questions on respondent and organizational backgrounds, a self-completion questionnaire comprising 66 questions (governance – 39 & performance -27) was successfully completed and returned by 144 participants. Further, a checklist of 19 items was constructed based on the Acts of Parliament and scored against the CACG Code provisions by the researcher. Using SPSS and Excel Programs, data was analyzed using descriptive (percentages, and mean percentages) and inferential (Pearson’s correlation, and simple linear regression) statistics. The Overall Compliance Index of SOCBs is 68% while SOUCs has an index of 45%. The correlation coefficients (r = 0.996 and r = 0.998) indicate a very strong positive linear relationship between governance and performance. Also, the regression results (adjusted r2 = 0.988, df = 3; p < 0.01) indicate a strong association between corporate governance and firm performance. The study shows that SOUCs’ rate of corporate governance compliance is weaker than SOCBs in most criteria set by the CACG Code, which might have caused low financial performance by SOUCs (40%) and high financial performance by SOCBs (64%). The findings of the study have practical and policy related implications to improve the performance of SOUCs in Sierra Leone. Abstract: Historically, state-owned commercial banks (SOCBs) in Sierra Leone have shown relatively high performance than State-Owned Utility Companies (SOUCs) in the country. While several issues may have contributed to such low performance by SOUCs, this study aims to explore whether and how (if any) compliance with corporate governance practices (based on CACG Code) varies between the high-performing SOCBs and low-performing SOUCs, and whether this variation of compliance causes performance differences. A cross-sectional research design with quantitative approach was adopted. A survey was conducted in two SOCBs and two SOUCs in 2025. Apart from questions on respondent and organizational backgrounds, a self-completion questionnaire comprising 66 questions (governance – 39 & performance -27) was successfully completed and returned by 144 participants. Further, a checklist of 19 items was constructed based on the Acts of Parliament and scored against the CACG Code provisions by the researcher. Using SPSS and Excel Programs, data was analyzed using descriptive (percentages, and mean percentages) and inferential (Pearson’s correlation, and simple linear regression) statistics. The Overall Compliance Index of SOCBs is 68% while SOUCs has an index of 45%. The correlation coefficients (r = 0.996 and r = 0.998) indicate a very strong positive linear relationship between governance and performance. Also, the regression results (adjusted r2 = 0.988, df = 3; p < 0.01) indicate a strong association between corporate governance and firm performance. The study shows that SOUCs’ rate of corporate governance compliance is weaker than SOCBs in most criteria set by the CACG Code, which might have caused low financial performance by SOUCs (40%) and high financial performance by SOCBs (64%). The findings of the study have practical and policy related implications to improve the performance of SOUCs in Sierra Leone. Abstract: Historically, state-owned commercial banks (SOCBs) in Sierra Leone have shown relatively high performance than State-Owned Utility Companies (SOUCs) in the country. While several issues may have contributed to such low performance by SOUCs, this study aims to explore whether and how (if any) compliance with corporate governance practices (based on CACG Code) varies between the high-performing SOCBs and low-performing SOUCs, and whether this variation of compliance causes performance differences. A cross-sectional research design with quantitative approach was adopted. A survey was conducted in two SOCBs and two SOUCs in 2025. Apart from questions on respondent and organizational backgrounds, a self-completion questionnaire comprising 66 questions (governance – 39 & performance -27) was successfully completed and returned by 144 participants. Further, a checklist of 19 items was constructed based on the Acts of Parliament and scored against the CACG Code provisions by the researcher. Using SPSS and Excel Programs, data was analyzed using descriptive (percentages, and mean percentages) and inferential (Pearson’s correlation, and simple linear regression) statistics. The Overall Compliance Index of SOCBs is 68% while SOUCs has an index of 45%. The correlation coefficients (r = 0.996 and r = 0.998) indicate a very strong positive linear relationship between governance and performance. Also, the regression results (adjusted r2 = 0.988, df = 3; p < 0.01) indicate a strong association between corporate governance and firm performance. The study shows that SOUCs’ rate of corporate governance compliance is weaker than SOCBs in most criteria set by the CACG Code, which might have caused low financial performance by SOUCs (40%) and high financial performance by SOCBs (64%). The findings of the study have practical and policy related implications to improve the performance of SOUCs in Sierra Leone.