Control environment and performance of Commercial Banks in Uganda: a case study of Kenya Commercial Bank Uganda Limited (KCBU)

Abstract

In Ugandan Banking industry, weaknesses in internal controls have led to poor performance of Banks and at some time closure of some in the early nineties. This study therefore aimed at examining how Bank control environment affected the performance of commercial banks in Uganda, a case study of KCBU. The study adopted a case study and cross-sectional survey designs. Questionnaires, interviews and documentation reviews were used in data collection. Data analysis was done using SPSS to determine the relationship between control environment and performance of commercial banks. The study findings indicated that all the factors of control environment (Integrity and ethical value, Bank organization structure, assigned authority and responsibility and HR policies and practices) had positive significant relationships with Bank Performance and their impacts were also found to be positive and significant. In support of the above, majority of the respondents indicated that the bank performance was good partly due to availability organisational structure with clear responsibilities and HR policies and practices of integrity and ethical values. The researcher recommends that employees should be given clear guidelines on exactly what needs to be done, when to do it, and the expected results. Having clear job specifications coupled with employee integrity and ethical values is very important since they all enhance bank performance.