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An Evaluation of the Quality of Corporate Governance in Bamenda Police Co-operativeCredit Union LTD (BAPCCUL) and Impacts on Key Stakeholders 1

RESEARCH PROJECT

An Evaluation of the Quality of Corporate Governance in Bamenda PoliceCo-operative Credit Union LTD (BAPCCUL) and Impacts on Key

Stakeholders

Okwen Kenne Foma

Word count: 6,124


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DEDICATION

TO

My parents, my wife and my friends


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ACKNOWLEDGEMENTS

Thanks to my project mentor (MR BARFOUR ADDO) for guiding me through this projectand for his relentless effort in making sure that my project is of great quality.

Very special thanks to the project participants. Also thanks to the manager of BAPCCUL forgiving interviews and filling out questionnaires as well as for giving me permission to carryout my project in the organization.

None of this would have been possible without the continuous support of my mother and mywife. Thanks for the wonderful love and support you both showed me.


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TABLE OF CONTENTS

INTRODUCTION6

CHAPTER ONE: PROJECT OBJECTIVES AND RESEARCH APPROACH

1.1 RATIONALE FOR SELECTING PROJECT T OPIC7

1.2 RATIONALE FOR SELECTING BAPCCUL 7

1.3 PROJECT OBJECTIVES 7

1.4 RESEARCH APPROACH ..8 CHAPTER TWO: INFORMATION GATHERING AND BUSINESS TECHNIQUE

2.1 PRIMARY SOURCES OF INFORMATION .9

2.2 SECONDARY SOURCES OF INFORMATION..10

2.3 LIMITATION OF THE SOURCES AND METHOD UTILIZED TO OBTAININFORMATION 10

2.4 ETHICAL ISSUES ENCOUNTERED IN GATHERING INFORMATIO N 11

2.5 BUSINESS TECHNIQUE AND MODELS12

2.6 LIMITATION OF BUSINESS TECHNIQUE AND MODEL .14

CHAPTER THREE: FINDINGS AND THE EVALUATION OF GOVERNANCE INBAPCCUL AND IMPACT ON KEY STAKEHOLDERS

3.0 FINDINGS FROM QUESTIONNAIRE AND OTHER DATA SOURCES.15

3.1 BOARD STRUCTURE..15

3.2 COMMITTEE AND STRUCTURE17

3.3 ROLES AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS INBAPCCUL..18

3.4 BOARD SKILLS, COMPETENCE AND KNOWLEDGE19

3.5 BOARD STEERING, STRATEGY, SYSTEM ANDSUCCESSION..20


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INTRODUCTION

The Bamenda Police Co-operative Credit Union LTD (BAPCCUL) Microfinance enterpriseis a savings and loan co-operative. BAPCCUL was created in 1969 by the police of westernCameroon with the primary goal to serve only the police force members. It later extended itsmembership to people outside the police force. Currently, the majority of the members arenot police and BAPCCUL is the second largest credit union in the league of credit unions inCameroon. BAPCCUL has five branches in Cameroon in the following regions: Yaound,Bamenda, Douala, Camp, Yabassi, and Bafia. This organization provides the followingservices to its members: payment of salaries, overdraft facilities and loans.


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CHAPTER ONE

PROJECT OBJECTIVES AND RESEARCH APPROACH

1.1 RATIONALE FOR SELECTING PROJECT TOPIC

The researcher has a particular interest in corporate governance and intends to carry out hisgraduate and PHD studies in this field to prepare to work as a consultant for organizationsand government institutions. This RAP is a stepping-stone for the researcher to become acorporate governance consultant.

Corporate governance is an important business topic to politicians, regulators and businessscholars. Since the ENRON scandal, many adjustments have been made to organizationsgovernance to prevent duplicitous transactions. Writing a research project on this topic willgive the researcher first- hand experience of governance and enhance the researchersevaluation skills.

1.2 RATIONALE FOR SELECTING THE BAPCCUL

The researcher believes BAPCCUL will provide valuable information for the evaluation ofcorporate governance with respect to international standards as compared to other creditunions, which are smaller and less organized.

The members and employees willingly cooperated in answering the questionnaire andinterviews issued by the researcher. These employees are qualified and understand theimportance of the project to the researcher and to the organization.

The researcher believes that targeting the second largest institution in the credit unionindustry can provide substantial information about the governance of credit union institutionsin Cameroon (Innocent, 2007). Information gathered during this research project may be ofused to future researchers who are interested in this industry and topic.

1.3 PROJECTS OBJECTIVESThe principal objective of this project is to evaluate the quality of corporate governance inBAPCCUL by determining if BAPCCUL governance complies with the Combined CodePrinciples of the UK and assessing the impact on the key stakeholders. This project willidentify weaknesses and make recommendations to enhance the quality of governance in theBAPCCUL.

This project intends to discover the following about the BAPCCUL:

How is the Board structured? What is the role of the Board and committees?


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What is the skill and competence of the Board members? Is reliable and relevant information circulated for the Board to make informed

decisions? How is succession planning carried out in the Board? What are the ethical codes established within the company? How does the company remunerate the Board and committee members? How does the company safeguard integrity in financial reporting? Who are the external and internal auditors and how independent are they? How does the company identify and manage risk? Who are the key stakeholders of the company? How does the company maintain proper dialogue with the shareholders?

How does BAPCCUL governance comply with the Combined Code Principles? How does the governance impact the stakeholders?

1.4 RESEARCH APPROACH

The researcher intends to use a simple and logical approach to accumulate, present andevaluate this information in order to meet the project objectives and answer the projectquestions.

Primary sources of information were extensively used to get information since the researcherconsiders this a valuable form of information. To answer the research questions, permissionwas requested from the BAPCCUL head office to send out questionnaires to a randomlyselected sample of employees, members and Board members. Interviews with the Boardmembers were carried out by the researcher. Thus, much of the evaluation was based on thequestionnaires and the interviews.

Secondary data was obtained from extensive web research and from textbooks. This helpedthe researcher to obtain internationally recognized corporate governance codes and principlesto assist in evaluating the primary sources of information.

Data obtained has been analyzed and presented in tables, pie charts, and vertical andhorizontal bar codes, so that the information obtained can be easily understood. Weightingsare given to the different areas of the combined code and each area is compared to that of theBAPCCUL so as to assess the implications to the overall quality of governance in theBAPCCUL. This approach highlights the qualitative aspects of the research and helps readersto easily evaluate quality of governance of the BAPCCUL with respect to the internationalstandard, the Combined Code of the UK.


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CHAPTER TWO

INFORMATION GATHERING AND BUSINESS TECHNIQUE

2.0 SOURCES OF INFORMATION AND DESCRIPTION OF THE METHODS USEDTO OBTAIN THIS INFORMATION

Primary and secondary sources of information were used to amass information to meet the project objectives.

2.1 PRIMARY SOURCES OF INFORMATION

Corporate governance questionnaire (Appendix 1): Questionnaires were sent to a sample ofemployees, Board and members at the head office in Bamenda. This was the principal sourceof information for the research.

The entire group of employees and Board members was used as the sample due to the low population size, so as to give a better result that represents the population. For the members,the researcher used random sampling techniques to minimize bias, thus ensuring that thesample accurately represents of the population of members.

ManagementCategory

Board Members Employees Members

Total number 13 36 16784

Sample size 13 36 100

Average number ofrespondent

10 25 80

Respondent base rate 77% 69% 80%

The aim was to get a sample representative of each population while minimizing the sample

bias. A bias sample is a sample with characteristics different from population (Perry, 2004 ).


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Interview (Appendix 2): This was designed to obtain further information that could not beobtained from using the questionnaires while also corroborating the information from thequestionnaire. The researcher was not able to interview all the Board members as wasintended. This interview targeted questions such as the Board remuneration and criteria forBoard membership.

Request for information (Appendix 3): This was used to get more information that could not be obtained from interviews and questionnaires, including details about organization structureand the organizations ethical policies. This re quest was made to the manager of theBAPCCUL headquarters. Request for the information acted as a corroborative source ofinformation for the questionnaire and interviews.

2.2 SECONDARY SOURCES OF INFORMATION

Corporate governance, annual reports, and journals from the BAPCCUL and othermanagement texts provided information for the research project. These texts providedinformation about general principles and concepts on corporate governance. Most businessmodels used for the evaluation of corporate governance and identification of stakeholderswere obtained from management texts and online materials.

Online materials: The researcher made use of the internet to gather materials for the research.ACCA, HELIUM, and FRC websites were used to obtain information that was utilized in theevaluation of the corporate governance of the BAPCCUL.

2.3 LIMITATION OF SOURCES AND METHODS UTILIZED TO OBTAININFORMATION

A) The researcher is aware of the limitations of the questionnaire, though it was the mainsource of information for the project. Participants might have chosen to respond insincerely;some participants refused to answer the questionnaire though the reason for the project wasclearly explained to them. Also designing a questionnaire that covered all information thatwas needed was not possible due to the problem of time and space. Not all questionnairesdistributed were retrieved. The researcher took a lot of time to design, distribute, collect andevaluate the questionnaires in order to obtain a fairly accurate representative sample for the

project. One hundred and forty-nine questionnaires were distributed.

B) Interview: The interviews were directed mainly at the Board of Directors and committeemembers. But getting to interview the Board of Directors was difficult since they had lots ofwork to do. Some Board members tried to make the interview short and it was not possiblefor the researcher to actually ask all the questions intended.

C) Request for information: Not all the information requested by the researcher was provided.Some of this information was considered confidential such as the bonuses and salaries of

Directors.


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D) Internet: The internet was a valuable information source. The researcher carefullyscrutinized the authenticity of websites and the reliability of the material obtained from thesewebsites.

E) Books: Obtaining books in the library was a grave problem for the researcher. The locallibrary has very few books on writing research papers and corporate governance. The few

books in the library were borrowed by students and were not returned on time. The problemof book scarcity was also due to the lack of many libraries in the researchers town. Theresearchers mentor was kind to lend books from his personal library for completion of the

project.

2.4 ETHICAL ISSUES ENCOUNTERED IN GATHERING INFORMATION

The researcher encountered a number of ethical issues during the process of gatheringinformation.

The information requested from the organization was handed to the researcher based on the belief that this was solely for academic purposes and not for any other ulterior motive. Basedon the principle of confidentiality, the researcher endeavored not to divulge any informationdeemed important to the organizations mana gement.The information obtained was evaluated based on a high degree of integrity. The project

mentor also ensured that the information was fair and honest by checking the researchersevaluation of the information gathered. No attempt was made by the researcher todeliberately falsify any information.Secondary information from books and articles was properly referenced and permission wasobtained to use this information, especially the information from the case study organization.In evaluating the information, the researcher found it imperative to adhere to the principle ofobjectivity in all judgments. The researcher tried not to be biased or prejudiced and tried notto pay attention to irrelevant material that would render the research not pertinent.

2.5 BUSINESS TECHNIQUES AND MODELS The Anglo-Saxon form of governance was used to evaluate the governance of BAPCCUL.These models include the Combined Code of the UK, Sarbanes-Oxley of the USA and theOECD MODEL as put forth in (Johnson and Scholes , 2008 ). The model used to evaluate theBAPCCUL governance is the Combined Code of the UK.

OECD Model


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The ( OECD, 2004) principle of governance was introduced in 1999 and has since been thecorporate governance benchmark in influencing the drafting of national codes. The main

principles as put forth in (Solomon , 2007) are as follows;

Protection of shareholders rights

Ensuring the equitable treatment of all shareholders

Recognition of rights of shareholders and employees

Ensuring timely and accurate disclosure

Ensuring the strategic guidance of the company.

SARBANES OXLEY

The Sarbanes-Oxley (SOX) Act of 2002 as found in (Anand, 2007 ) was created as part of thecorporate scandals that occurred late in 1990s and early 2000s.The act was passed so as torestore and en hance investors confidence in the US public financial market. One of mainobjectives of the act was to establish clear accounting and reporting practices for publiclytraded companies in the U.S. Public companies and their subsidiaries both in and out of USAcomply with the act.

MAIN SECTIONS OF THE SOX

From (Soxlaw, 2006), the main sections of the SOX codes are;

Sarbanes-Oxley Section 302

Sarbanes Oxley Section 401




The SOX is a rule-based approach to corporate governance, see ( Campbell, 2008b)

COMBINED CODE OF THE UK


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The Combined Code of Governance (Combined Code of Governance, 2008) was formerlythe UK corporate governance code that set standards of good governance practices for listedcompanies. Its based on principles rather than rules and companies are required to comply orexplain otherwise (Campbell, 2008b).

The Combined Code is made up of four main areas:

1) Directors (responsibilities of Board, Chairman and Chief Executive Director (CEO),Board balance and independence, appointments, information and professionaldevelopment, re-election).

2) Remuneration (remuneration policy for directors).

3) Accountability and auditing (financial reporting, internal control, auditors and auditcommittee).

4) Relationship with stakeholders (dialogue with institutional stakeholders, constructiveuse of governance) and institutiona l stakeholders (dialogue with companies,evaluation of governance, shareholder voting.

5)

1T-7S model

This model by (Rowa, 2008) looks at different areas to evaluate a companys board. Theseareas include:

1) Steering: Does the organization have a mission and ethical code? Does everyoneunderstand the mission?

2) Structure: How are the Board and committees set up? Is the board the right size andare the committees appropriate?

3) Skills: Does the Board receive training needed to carry out their job?

4) System: Are materials distributed in advance of meetings? How is communication between members of Board?

5) Strategy: Does the company have a long-term plan?

6) Succession planning: Is there always a pool of candidates for Board member andChief Executive Officer (CEO) positions? Is the Board qualified to pick the CEO?

7) Stakeholders: How is the Boards relationship with stake holders?

8) Teamwork: Does the Board work as a team? Do they communicate as a team?


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Percentages, bar charts and pie charts are also used in this RAP to present the informationfrom the questionnaire.

2.6 LIMITATIONS OF BUSINESS TECHNIQUES AND MODELS

Percentages, bar charts and pie charts are based on the underlying data from which they areconstructed and can only be accurate if the underlying data provided is also accurate (Doaneand Seward, 2008).

The Combined Code of Corporate Governance is a model used in the UK as a benchmark forcorporate governance best practice. This model is based on the dynamic market orientation,extensive internationalization and fluid capital investments in the UK (Johnson and Scholes,2008). Using this model to evaluate organization governance in a developing country doesnot accurately represent the organization because of poor fluid capital investments, pooreducational background, poor governance awareness, different business cultures and the sizeof the BAPCCUL compared to multinational companies listed in the London StockExchange.

The 1T and 7S model might not contain all the different attributes needed to describe andevaluate a Board in a developing country since its assumptions are based on business culturein the USA, which might be different from the practices in Cameroon.

CHAPTER THREE


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FINDINGS AND THE EVALUATION OF GOVERNANCE IN BAPCCUL AND THE

IMPACT ON KEY STAKEHOLDERS

3.0 FINDINGS FROM QUESTIONNAIRE AND OTHER DATA SOURCESThe questionnaire was designed to assess the extent of corporate governance in theBAPCCUL. The findings of the questionnaires and the other data are reported based on the

project questions using the 7S and 1T model to describe the Board.

3.1 BOARD STRUCTUREBoard structure according to (Rowe, 2008) is how the Board and its committees are set up. Is

the Board the right size? Are the committees appropriate? The Board of the BAPCCUL ismade up of individuals, called members, who own the credit unions. To become a memberaccording to (The Union, 2005), the individual must meet the following criteria

a) Fill a standard membership application form

b) Pay a registration fee of 3000 FCFA

c) Buy at least 50 shares at 1000 FCFA per share. These shares are refundable uponwithdrawal of membership

d) Save at least 1000 FCFA

e) Acquire a loan policy and by-laws

f) Submit two passport-size photograph and a copy of birth certificate or identity card

g) Pay a building contribution fee of 5000 FCFA.

TABLE 1: Yes or No Analysis for Questions 1-5 of the Questionnaire

From the analysis of the question 1 of the questionnaire, 70% of members, 100% of the

Board and employees indicate that the Board is made seven members. For question 2, 70% of

Q Members Board EmployeesYes No NA Yes No NA Yes No NA

1 - - - - - - - - -2 - - - - - - - - -3 - - - - - - - - -4 80% 10% 10% 100% - - 60% 20% 20%5 - 70% 30% - 80% 20% - 80% 20%


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members, 100% of the Board and 80% of the employees indicate there are three Executiveand four Non-Executive Directors. For question 3, 80% of members, 100 % of the Board and100% of employees indicate that the Chairman is from the Executive Board. Question 4responses indicate that the President of the Board acts as the Chairman of the Board and theCEO of the organization. There are no clearly defined functions differentiating the CEO andthe Chairman positions based on the response to question 5 of the questionnaire with 77% ofrespondents indicating No to the question.

According to (BAPCCUL, 2010), members can become part of the Board of directors if theymeet the following criteria: they must save at least 12 times per year, have at least 1 millionFCFA in their account, and have no loan delinquencies. The Directors are voted-in every fiveyears by the members during the general meeting . Each Director stays in office for only two

terms, but can wait for another five years to get re-elected. The Board is headed by thePresident, who is voted-in by members through a 51% majority. The President then elects aVice President who acts as his deputy in the Board. The daily management is delegated to theManager of the credit union who participates in the Board meetings but is not considered aBoard member himself. This person is under the supervision of the Executive Board ofDirectors, headed by the President (Appendix 2, Interview Questions

3.2 COMMITTEES AND FUNCTIONS

The committees, according to (BAPCCUL, 2010), carry out the following functions:

A) SUPERVISORY COMMITTEE: This committee is made up of three members of thecredit union and reports directly to the general assembly. Their main function is to ensure thatthe accounts are properly kept by the manager and also to ensure that the control activities inthe organization are appropriate and adequate. They carry out cash counts, inventoryinspections, and asset evaluations to ensure the safeguard of the credit union assets. Thesemembers are not part of the Board.

B) WOMENS COMMITTEE: The Womens committee f unction is to help enhance the participation of women in the organization. They work to increase the number of femalemembers of the BAPCCUL and also to participate in the Board and committees of theorganization. This committee reports directly to the general assembly. Members of thiscommittee are not part of the Board.

C) EDUCATION COMMITTEE: This committee helps improve members knowledge in allareas concerning the management of their credit union. They also ensure that the Boardmembers and Committee members enhance their knowledge so that they can be able to makesound decisions for the going concern of the organization. This committee brings experts toorganize seminars and ensure that members attend the seminars. Members of this committeeare made up of Executive and Non-Executive Directors.


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D) CREDIT COMMITTEE: The Credit committee function is to ensure that loans aregranted within the loan policy and that delinquency rates are minimized. This committeereports directly to the Board members and is made up of non-Executive Directors.

TABLE 2: Committees and Number of Members

Committee Number of Members PercentageSupervisory committee 3 25%

Womens committee 3 25%Education committee 3 25%

Credit committee 3 25%

Based on the information received from the Manager, there are seven Board members and sixother individuals who are not Board members acting in the S upervisory and Womenscommittees of the organization. The Education and Credit committees are made up of Boardmembers. (See Appendix 3, Request for Information).

3.3 ROLES AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS IN THEBAPCCUL


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The Board has the following responsibilities:

a) Oversee the activities of the credit union b) Review the financial and operational performance of the companyc) Discuss loan investments that are above the management and credit committeesd) Recruitment and dismissal of staffe) Motivation of staff and Board membersf) Endorse the financial statement produced by the management of the companyg) Set the strategic direction of the companyh) Arrange acquisition of land and the leases of premises and propertyi) Establish and monitor delegated authorities

j) Decide the level of remuneration for employees and members of the Board

k) Identify principal risk and review the risk management policy (Appendices 1 and 2)

3.4 BOARD SKILLS, COMPETENCE AND KNOWLEDGE

Skill is the ability to do something well while knowledge is fact, information and skillacquired through experience or education (Oxford dictionary, 2008). Based on question 6 ofthe questionnaire, 75% of respondents indicate that no skills or knowledge is required to

become a Board member. On average, 87% indicate Yes on question 7, that educationalcourses are offered by the company. The interview (Appendix 2) reveals that only twoworkshops were held based on microfinance performance and regulations. The table and

chart below is based on questions 6 and 7 in the questionnaire.TABLE 5: Average Responses to Questions 6 and 7

Question Average Yes Average No Average NAQ6 0% 75% 25%Q7 87% 0% 13%

FIGURE 2: Diagram Showing Responses to Questions 6 and


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3.5 BOARD STEERING, STRATEGY, SYSTEM AND SUCCESSION

The BAPCCUL has no formal ethical code or conducts written by the Board of Directors.This conclusion is based on the findings from the questionnaire and interview. The bar chartindicates the percentage of responses from question 8 of the questionnaire.

FIGURE 3: Column Showing Responses (%) to Question 8 of the Questionnaire


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The majori ty of respondents from the diagram fell in the N category for NO, thus providing the basis for the researcher to conclude that no formal ethical code exists in theBAPCCUL.

Based on question 9 of the questionnaire, an average of 63% of respondents indicate that nomission statement or vision statement exists in the organization and further investigation fromthe request for information proved this to be true.

With respect to the strategies formulated and announced, an average of 87% of therespondents indicates that the Board formulates and announces all significant strategies(Appendix 1: question 10 of questionnaire). An average of 77% of the respondents selectedYes for question 11 of the questionnaire, indicating that the Board has ensured andimplemented an effective internal control. Based on question 12 of the questionnaire, anaverage of 80% of the respondents chose Yes, while further interviews with the Boardmembers showed that significant matters are brought to their attention at the relevant time fordeliberate decisions to be made.

Twelve Board meetings have taken place over the past two years, based on the answers toquestion 14. The researcher only considered the answers given by Board members onquestions 15, 16 and 17. The answers are presented as follows:

TABLE 6: Responses to Questions 15, 16, and 17 of the Questionnaire

Yes No N ABoard Q15 100% 0% 0%Board Q16 70% 20% 10%Board Q17 60% 30% 10%Average 77% 17% 7%

FIGURE 4: Average Yes, No and Not Applicable Responses to Questions in Table 6


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The pie chart is drawn based on the Board members answers to the questionnaire for Q15,Q16, and Q17. The chart indicates that the Board members are satisfied with the notice sentto them before meetings. The Directors are also satisfied with the way in which minutes are

reported and distributed in a timely manner.

The interview (Appendix 2) with the Board and Manager reveal that there is no succession planning for the Board of Directors or the Committee members. Each member of the Boardserves five years in office and can later be re-elected (BAPCCUL, 2010). To become part ofthe Board requires a political process whereby members rally with colleagues and othermembers to gain support to be elected.

3.6 BOARD AND COMMITTEE REMUNERATION

Based on the interview with Board members, the Board members are paid salaries, and havean advantage in getting loans from the company, with discretionary lending above anundisclosed amount. The level of Board member salaries was also undisclosed to theresearcher. No written document was given to the researcher to corroborate the remunerationsof the Board members and Committees.

3.7 FINANCIAL REPORTING, INTEGRITY AND INTERNAL CONTROL

According to (Hussey, 1999), internal control system is a system of controls for both

financial and non-financial information set up by the management of a company to carry out


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average of 87% of the respondents indicates that BAPCCUL has an external auditor, thuscorroborating the findings of the CAMCCULs role (question 32). Also an average of 85%indicates that the external auditors are present during general meetings (question 33). Anaverage of 67% of the respondents indicate that the auditors are independent (question 34).Reasons given by those who think auditors were not independent are following:

a) The auditors set up the accounting system of credit unions and audit the system

b) Most of the external auditors are close friends of Board members and the Manager

c) Some of the auditors are bribed to overlook material misstatements.

3.9 RISK MANAGEMENT

Risk, according to Griffiths, is the chance that an event or action will affect an organizationsability to achieve its objectives and successfully execute its strategies, while risk managementis the process by which risk is identified, evaluated and controlled (Griffiths, 2005). Thefollowing risks are faced by the credit union:

Liquidity risk: This is the risk arising from a credit unions inability to meet its obligationswhen they are due without incurring unacceptable losses.

Transaction risk: This is the risk to earning ability or capital arising from problems withservices and product delivery, also known as operational risk.

Strategic risk: The risk to earning ability or capital arising from adverse business decisions orimproper implementation of business decisions.

Reputation risk: The risk to earning ability or capital arising from negative public opinion.This affects the ability to continue servicing existing relationships or establish newrelationships.

Compliance risk: The risk to earning ability or capital arising from violations of, or non-conformance to laws, rules, regulations or prescribed practices by the COBAC and the

CAMCCUL.

Interest rate risk: The risk to earning ability or capital due to changes in the interest rate.

Credit risk: risk arising from the possibility that the borrower will default payment (Mishkin,1998). This is the main risk targeted by the credit unions in Cameroon, due to the high loansoutstanding.

Based on interviews conducted, BAPCCUL has a loan committee that helps to control,monitor and report the credit risk of the organization to the Board and members. The LoanOfficer identifies the delinquent loans in the organization and helps in the recovery of theloans with the credit committee. The CAMCCUL, according to


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(http://www.camccul.org/camccul.org/service ), also helps in risk management for all creditunions under their control. They work with the credit committee to mitigate credit risk fortheir affiliated credit unions.

4.0 RELATIONSHIPS WITH SHAREHOLDERS, INSTITUTIONALSHAREHOLDERS AND SHAREHOLDER RIGHTS

On question 35, 77% of the respondents selected individuals as the main share holders of theBAPCCUL. From the questionnaire, an average of 80% indicated that all shareholders haveequal rights in the BAPCCUL (question 36). Based on satisfaction and participation in thegeneral meetings (question 37), the following data was obtained and is represented in the

chart below:

TABLE 8: Responses to Question 37 of the Questionnaire

Respondent Group Yes No NAMembers 65% 20% 15%

Board members 70% 20% 10%

Employees 60% 40% 0%

FIGURE 5: Diagram of Table 8
http://www.camccul.org/camccul.org/servicehttp://www.camccul.org/camccul.org/servicehttp://www.camccul.org/camccul.org/servicehttp://www.camccul.org/camccul.org/service


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Board members are the most satisfied with the BAPCCUL overall, while the membersfollowed as second most satisfied, and the employees are the least satisfied.

Based on question 38 of the questionnaire, the following data indicates the Boards, the members and the employees satisfaction level with the way the organization is controlledand directed:

TABLE 9: Table of Responses to Question 38 of the Questionnaire

Respondent Group Yes No NAMembers 60% 30% 10%

Board and Committee 80% 0% 20%

Employees 50% 40% 10 %

FIGURE 6: Chart of Table 9


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4.1 EVALUATION OF BAPCCUL CORPORATE GOVERNANCE

(A) BOARD OF DIRECTORS AND COMPOSITION (Total weighting 50%)

Combined code BAPCCUL GOVERNANCE Points

1 Every listed company should havean effective Board.

The BAPCCUL is headed by aBoard of Directors.

6.25%

2 The positions of Chairman andCEO should be separated.

The President is both theChairman and CEO.

0%

3 There should be at least as many Non-Executive Directors asExecutive Directors.

The Board is composed of threeExecutives and four Non-Executive Directors.

6.25%

4 Appointments to the Board shouldtake place in a formal andtransparent process.

Appointments to the Board are based on majority votes.

6.25%

5 Information should be provided tothe Board.

Necessary information is provided to the Board.

6.25%

6 There should be a regular

assessment of Board performance.

There is no assessments of Board

performance.

0%

7 The Board should submitthemselves for re-election afterthree years.

Board members submitthemselves for re-election afterfive years. 0%

8 The Board should comprise of both Executive and Non-ExecutiveDirectors.

The Board is comprised of bothExecutive and Non-ExecutiveDirectors.

6.25%

Total 31.5%


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B) REMUNERATION (weighting 18.75%)

9 Remuneration committeesshould report activities in theannual financial statement.

There is no remuneration committeeand no report in the annual financialstatement. 0%

10 Directors should not determinethe remuneration.

President of the BAPCCULdetermines the salaries and bonusesof Board members. 0%

11 Proportions of bonuses should be based on performance.

Proportion of bonuses is not basedon performance.

0%

Total 0%

C) ACCOUNTABILITY AND AUDIT (weighting 18.75%)

12 The Board should maintainsound internal control.

The Board and auditors maintainsound internal control.

6.25%

13 The Board should present a balanced assessment of entity performance and position.

The Board presents a soundassessment of entity position and

performance. 6.25%

14 The Board should makearrangements for maintaining agood relationship with auditors,including the establishment of anaudit committee.

No audit committee exists and thesupervisory committee has verylittle dialogue with the auditors. 0%

Total 12.5%

D) INSTITUTIONAL STAKEHOLDERS AND RELATIONSHIP WITHSTAKEHOLDERS (Weighting 12.5%)


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15 Directors should have regulardialogue with institutional

investors.

No institutional shareholders ordialogue is in general meetings.

0%

16 Directors should encourage participation of all shareholders inannual general meeting.

Members participation in generalmeeting is high and they make gooduse of their votes. 6.25%

Total 6.25%

FIGURE 7

The Combined Code weighting as in Figure 7 is based on the different items that constitutethe four main areas in the Combined Code. The Board and composition get 50% weighting

because they have eight out of the sixteen items in the Combined Code and thus are most

important to overall quality of corporate governance of the BAPCCUL. While remunerationand accountability has three items each out of the sixteen items and finally relationship withshareholders constitutes two out of the sixteen items, making it least important.


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FIGURE 8

Board and composition

remuneration

accountability and audit

relationship with shareholders andinstitutional investors

32%

0.00%

12.50%

6.25%

BAPCCUL GOVERNANCE WIEGHTS

BAPCCUL GOVERNANCE

FIGURE 9

Board and composition

remuneration

accountability and audit

relationship with shareholders

50%

18.75%

18.75%

12.50%

31.50%

0%

12.50%

6.25%

BAPCCUL VS COMBINED CODE

BAPCCUL POINTS COMBINED CODE WEIGHTINGS


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4.2 CONCLUSION OF EVALUATION AND IMPLICATION TO OVERALL BAPCCULGOVERNANCE

From the researchers perspective and from a theoretical poi nt of view, good governancemeans complying with all the sixteen items in the Combined Code. With respect to theevaluation above, Board and composition gets the most weighting and the BAPCCULcomplies with five out of the eight items in the area (Figure 7 & 8) giving it a 31.50% out of50% weighting, which is good in relation to the overall quality of governance in theorganization. Remuneration and accountability comes second with a 39% weighting in total,with the BAPCCUL having 0% compliance in remuneration and 12% compliance inaccountability, producing a total of 12% weighting out of 39%, which is bad to the overallquality of governance. Concerning relationship with shareholders and institutional

shareholders, the BAPCCUL scores 6.25% out of the 12% which ranks average for overallquality of governance.

4.3 STAKEHOLDERS OF BAPCCUL AND INFLUENCE

Stakeholders include any group or individual that can affect or be affected by theachievement of the organizations objectives (Freeman, 1984). The followin g are thestakeholders of the BAPCCUL:

1) COBAC: French acronym for The Banking Commission of Central African States.This body sets the regulations for all banks and microfinance institutions in centralAfrican states see (Banking Commission for Central African States, 2002).

2) CAMCCUL: The umbrella organization based on the COBAC microfinanceregulations to control all the credit unions. This organization acts mainly as thesupervisory and control organ of the credit union. This organization sets the internalcontrol and accounting norms for all credit unions(http://www.camccul.org/camccul.org).

3) NON-BOARD MEMBERS: The individuals who have accounts and are eligible forloans. Members are the main owners of the credit union and participate in generalmeetings of the organization.

4) COMMUNITY: The non-members of the credit union who are affected by theactivities of the credit union.

5) EMPLOYEES: The people paid to carry out the operation of the organization,including the Manager.

6) BOARD AND COMMITTEE MEMBERS: The members elected to sit on the Boardto protect members investments and ensure the going concern of the organization .


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The stakeholders influence on the BAPCCULs objectives is determined using theMENDELOW Power-Interest grid as found in (Johnson and Scholes, 2008) and ( Campbell,2008a ). Power (P) is the stakeholders ability to influence the objectives of the organizationwhile interest (I) is the willingness to influence the objectives.

LOW I HIGH

HIGH

P

LOW

Although it is a very important framework, the issue with this framework is that it is veryhard to find ways of effectively measuring the stakeholders power and interest. Also the griddepicts their position as static, positions can change with respect to circumstances in the

business environment ( Campbell , 2008a).

4.4 IMPACT OF OVERALL QUALITY OF GOVERNANCE ON KEYSTAKEHOLDERS

From the grid, the members, the Board and CAMCCUL are the key stakeholders due totheir high interest and power to infl uence the BAPCCULs objectives.

COBAC

Keep Satisfied

CAMCCUL

Board and committee

Members

Key Players

Community

Minimal Effort

Employees

Keep Informed


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MEMBERS

1) The Board members chosen by the members might act based on their personal interestand the interest of those who voted them into their position, therefore potentially causinganimosity among other members in the credit union.

2) The lack of sufficient information about the companys going concern inhibits themembers from evaluating the companys viability.

3) Lack of transparency of the Boards remuneration is detrimental to the savings anddeposits of the members since these Board members might potentially approve exorbitantsalaries for themselves.

4) The governance structure gives members the opportunity to run the organization bychoosing their own members to head the Board and the committees.

BOARD AND COMMITTEE

The BAPCCULS governance gives the Board the opportunity to represent their fellowmembers, run the organization for their interest and reduce the agency problem in theorganization. Poor governance could create animosity between the members and the Board,thus leading to serious problems in electing new members in the long run to manage theorganization.

Board members might also lose their integrity, thus leading to high scrutiny of their activities by the government and regulatory bodies of credit unions.

CAMCCUL

As the umbrella organization for all credit unions, governance of the credit unions has aserious impact on the performance and public image of the CAMCCUL. The BAPCCUL isthe second largest credit union in Cameroon (Innocent, 2007) and poor governance in thisorganization will increase doubt in the credibility of their umbrella organization to control theindustry. This may lead them to face serious sanctions from the COBAC and the government.Good governance will enhance public image and performance.


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4.5 LIMITATION OF RESULTS

. The following are the limitations of the result:

1) The questionnaire used as the primary source of information has many disadvantagesas aforementioned; this limited the response because respondents might have giveninsincere responses or incomplete questionnaires.

2) Access to some information was not possible since it was considered confidential ornot available.

3) Absent members and Board members during the interviews and disruptions during theinterviewing process made it difficult to collect reliable information for the research.

4) There may be some bias in the organization based on the responses of the employeesor members who are not happy with the Board and other aspects of the organization.

5) There might also be the possibility that the Combined Code model is not suitable forthe evaluation of a small microfinance enterprise in a developing country for theresearcher to make his evaluation, due to the different reasons aforementioned.

6) The limited number of publications on the BAPCCULs governance made it difficultfor the researcher to get other perspectives, compare conclusions or gather moreinformation conducted outside of this project.

7) The 1T and 7S model might not be the best possible model to describe the Boardsince it may not contain all the specifications needed to describe a Board inCameroon.

8) The use of software such as Atlas.ti to thoroughly analyze data was not available tothe researcher in Cameroon.

4.6 WEAKNESSES

1) The President of the BAPCCUL Board acts as both the Chairman and the CEO of theorganization.

2) There are no remuneration, audit or nomination committees in the BAPCCUL.

3) Board members term of five years in office is long compared to the three -year termrequired by the Combined Code.

4) There is no policy on evaluating Board performance.

5) The President of the Board may influence the granting of loans for himself and hisfriends since he has a lot of power to control the Board and the day to day running ofthe organization.

6) The BAPCCUL has no clear mission statement or ethical code to guide the employees

of the organization.


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7) CAMCCUL sets the internal control and audits the organization, thus limitingindependence.

8) The credit committee is made up of Board members who may overlook orintentionally disregard loan procedure in giving out loans to their friends.

9) Directors are involved in the determination of their salaries and bonuses.

4.7 RECOMMENDATIONS

1) The positions of CEO and Chairman of the Board should be given to two separateindividuals.

2) The Board should bring in outside directors who can help im prove the Boardsindependence and skills.

3) Nomination, remuneration and audit committees should be created. 4) The Boards performance should be evaluated yearly with an evaluation policy

drafted by the committees and CAMCCUL.5) The Board should provide reports on their salaries and other benefits.6) CAMCCUL should act as the internal auditor while letting the credit unions appoint

their external auditors to give an independent report on the financial status of thecompany.7) CAMCCUL should not set up the internal control or audit the credit unions. These

activities impair their independence as external auditors.8) The Education committee should organize more seminars and workshops for

Directors and members so as to enhance members skills and ensure good succession planning.

9) More disclosure should be provided in the financial reports of the credit union formembers to analyze the companys performance and financial position.


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SECTION TWO

SKILLS AND LEARNING STATEMENT

CHAPTER 1: LESSONS LEARNED FROM MEETING WITH YOUR RESEARCHMENTOR AND PRESENTATION

While meeting with my mentor, I had the opportunity to practice and learn many valuableskills for my professional development and the RAP. The skills learned are as follows:

1) COMMUNICATION SKILLS: The meetings with my mentor enabled me to enhancemy listening, speaking and non-verbal communication skills. During the course of themeeting, I learned to establish a rapport with my mentor by listening carefully andattentively to ensure that my mentors suggest ions became part of the RAP. I learnedto present my own ideas to my mentor while being mindful of my body language,attentive to professional discourse, and demonstrative of proficient English.

2) PLANNING SKILLS: Planning was one of the greatest skills I obtained during thecourse of my meetings with my mentor. Based on my mentors tight schedule, I hadto ensure that the time for the meeting was well planned and that the scope and qualityof the discussion was organized before the meeting so as not to waste my or mymentors valuable time discussing matters not relevant to the projects success.

3) IT SKILLS: I learned to demonstrate to my mentor the knowledge of MicrosoftOffice EXCEL, PowerPoint, and Word programs. PowerPoint was used to present thework to my mentor, thus enabling me to show the mastery of how to design andsummarize materials in slides that can be easily understood by professionals in allfields. I also demonstrated my ability to import data from one application to anotherand how to design charts in EXCEL.

4) SELF REFLECTION SKILLS: Meeting with my mentor enabled me to examine my performance carefully, identifying weaknesses in my project and ideas. The meetingsalso helped me to reflect on other skills such as communication, IT use, and planningin order to understand my weaknesses and strengths for future improvement.

5) Finally, I understood the importance of values such as patience, self-discipline, andfrustration mitigation. My mentor was busy most of the time, which left me to waitseveral hours to discuss the project. Many times, meetings were cancelled and re-scheduled which conflicted with my schedule. With patience and discipline, however,

I ensured that meetings ended successfully and both parties were satisfied.


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CHAPTER 3: HOW HAVE YOU DEMONSTRATED YOUR INTERPERSONAL ANDCOMMUNICATION SKILLS DURING THE PROJECT WORK?

I was able to put to use a number of communication and interpersonal skills in the process ofundertaking this research.

The ability to build trust was a valuable interpersonal skill I gained in carrying out the project. I learned to win the trust of the Manager and Board members for them to beinterviewed and for the Manager to provide valuable and confidential information for my

project.

The project was an opportunity for me to demonstrate professional etiquette as I had to meetManagers and other business professionals. This etiquette was necessary to obtain

information for writing a good project. This professional etiquette showed my maturity and professionalism of my work.

Handling difficult people and situations was one of the most important interpersonal skills Ilearned from carrying out the project. Many individuals were arrogant and reluctant to answerthe questionnaire or interview questions. Some thought it was a waste of their time, but I

persuaded them by explaining the importance of the project to me and to the organization.

The project helped me to enhance my negotiation skills since I had to make sure I achieved awin win situation with my project mentor. I did not want to waste my mentors valuable time

or my own. I negotiated with the interviewees about the time and place to hold the interview.

Making a PowerPoint presentation was a good opportunity for me to put my public speakingskills to the test. I had to ensure that my oratory skills and body language were appropriatefor the scenario. I encountered some hurdles during this meeting, like speaking loudly,fluently presenting ideas and demonstrating mastery of the English language. I used mywriting and presentation skills in presenting clear and comprehensive information.

The project was an opportunity to test my listening skills since I had to listen carefully to theresponses of the interviewees to ensure accurate representation in the written project.

I discussed and debated some aspects of my research with friends and other professionalsinterested in the topic. This demonstrated my ability to engage constructively and

professionally in intellectual debates.

Finally, I learned how to establish a rapport with individuals during first meetings. This skillis important not just for the project but also for my professional development in a businessenvironment.


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CHAPTER 4: HOW HAS UNDERTAKING THE RAP HELPED INYOUR ACCOUNTING STUDIES OR YOUR CURRENT EMPLOYMENT?

Corporate governance is a major topic in the business world and accountants shouldunderstand how the governance of their organization impacts performance and gives theorganization a competitive advantage or disadvantage.

Undertaking the RAP was an opportunity for me to understand corporate governance in aspecific organization. This understanding enhances my knowledge in this topic and has givenme practical experience on a well-debated and contemporary management topic.

Undertaking the RAP was an opportunity for me to add more value to my accountingknowledge, giving me the chance to practice my interpersonal skills, information technology

skills and planning abilities. All of these skills are valuable in the business environmenttoday. The era when accountants were known to be number -crunchers are long gone.Accountants are now expected to participate in major organizational strategies and tocommunicate their ideas to other professionals in a clear and concise manner.

Accountants are expected to have high moral standards. The ACCA emphasizes theimportance of ethics in the profession and demands that its members and students upholdhigh ethical principles. This project was an opportunity for me to uphold high ethical

principles such as confidentiality, integrity, and professional due care. I learned to handleconfidential information and make judgments regarding pertinent areas in the RAP.

Undertaking the research was an opportunity for me to use accounting models in real lifesituations and question the practicality of these models in different business cultures, thusidentifying the limitations of the models. I came to understand the difficulties that accountingscholars face when carrying out research and testing models in different business scenarios. Ilearned how real life situations can differ from the theoretical concepts that are based onassumptions.

Finally, I believe that writing this RAP has improved my ability to write papers concerningaccounting and non-accounting topics. I know these skills will help me in my future studiesand competitively position me for a successful career in accounting


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APPENDICES

APPENDIX 1:

QUESTIONAIRES ON CORPORATE GOVERNANCE AND IMPACT ONSTAKEHOLDERS FOR BAPCCUL

I am undertaking a research project on corporate governance for a Bsc in Applied Accountingat Oxford Brookes University under the ACCA program. This information requires thecollection of various data on corporate governance. This questionnaire is an effort towardaccumulating such data for the purpose of academic research only.

1) How many directors are on the Board?

2) How many are: a) Executive Directors..

b) Non- Executive Directors..

3) The Chairman of the Board has been elected from the:

a) Executive Directors

b) Non-Executive Directors

4) Is the same individual concurrently occupying the positions of CEO and Chairman?

a) Yes b) No

5) Are the functions of the President and the Chairman of Board clearly defined by theBoard of Directors?

a) Yes b) No

6) Are any particular skills or knowledge required to become a member of the Board?

a) Yes b) No

7) Are there any orientation courses or other educational courses in order to improve theBoards competence and acquaint them with the company?

a) Yes b) No

DUTIES AND RESPONSIBILITIES OF THE BOARD

8) Has the statement of ethics code been issued and endorsed by the Board?


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a) Yes b) No

9) Has the Board adopted a vision or mission statement?

a) Yes b) No

10) Has the Board formulated corporate strategies and announced significant policies?

a) Yes b) No

11) Has the Board ensured the implementation of effective internal control? a)Yes b) No

12) Are all significant matters brought to the attention of the Board of Directors, e.g.

investments or delinquent loans?

a) Yes b) No

13) Please list some of the duties and responsibilities of the Board of Directors:..........................................................................................................................................................................................................................................................................................................................

BOARD MEETINGS

14) How many Board meetings have taken place over the last two years?

..

15) Are the minutes of the meetings properly recorded and sent to the Directors in adesignated period of time?

a) Yes b) No

16) Does the Management ensure that notice is sent some days prior to the meetings?

a) Yes b) No

17) Are all significant issues addressed in the Board meetings for the Boardsconsideration?

a) Yes b) No

FINANACIAL REPORTING AND INTERNAL CONTROL

18) Does the Board of Directors present a balanced and understandable report aboutthe position and prospects of the company?

a) Yes b) No


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19) Does the Board explain their responsibilities for preparing the account in theannual reports?

a) Yes b) No

20) Are there any reports by the Directors concerning the going concern of thecompany and their assumptions?

a) Yes b) No

21) Does the company circulate the required information to the government and otherregulatory bodies?

a) Yes b) No

22) Is there an annual review of the internal control by the Board?

a) Yes b) No

AUDIT COMMITTEE AND AUDITORS

23) Has an Audit committee been established in the BAPCCUL?

a) Yes b) No

24) How many members are Executive Directors

or Non- Executive Directors ?

25) Is the Chairman an

a) Executive Director b) Non-Executive Director

26) What are the responsibilities of the Audit committee?

............................................................................................................................

.....................................................................................................................

27) Who recommends the auditors to the members or the Board ?

a) Audit committee b) Others

28) How many meetings of the Audit committee have taken place over the last 12months?

29) Is the internal audit


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a) Yes b) No

37) Are you satisfied with the way the BAPCCUL is controlled and directed?

a) Yes b) No

38) If not satisfied with the control and direction, please state the reason(s):


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QUESTION MEMBERS BOARD EMPLOYEESYes No NA Yes No NA Yes No NA

1 - - - - - - - - -2 - - - - - - - - -3 - - - - - - - - -4 80 10 10 100 0 0 60 20 205 0 70 30 0 80 20 0 80 20

6 0 60 40 0 75 25 0 90 107 70 0 30 100 0 0 90 0 108 0 75 25 0 70 30 0 90 109 30 60 10 40 60 0 20 70 10

10 80 0 20 100 0 0 80 10 10

11 60 30 10 90 0 10 80 10 10

12 70 20 10 80 10 10 90 - 10

13 - - - - - - - - -

14 - - - - - - - - -

15 - - - 100 0 0 - - -

16 - - - 70 20 10 - - -

17 - - - 60 30 10 - - -

18 60 - - 100 0 0 70 - -

19 30 - - 50 - - 30 - -

20 40 - - 60 - - 40 - -

21 30 - - 100 - - 100 - -

22 60 20 20 80 - - 80 - -

23 0 90 10 0 100 0 70 20 10

24 - - - - - - - - -

25 - - - - - - - - -

26 - - - - - - - - -27 - - - - - - - - -

28 - - - - - - - - -

29 - - - - - - - - -

30 - - - - - - - - -

31 - - - - - - - - -

32 95 0 5 100 0 0 80 0 20

33 75 0 25 90 0 10 90 0 10

34 40 40 20 70 20 10 70 30 0


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35 - - - - - - - - -

36 80 10 10 80 0 20 70 20 10

37 65 20 15 70 20 10 60 40 0

38 70 20 10 80 0 20 50 40 10

B) MEARSUREMENT SCALE FOR BOARD ANALYSIS OF QUESTIONNAIRE

C)_MEARSUREMENT SCALE FOR EMPLOYEES ANALYSIS OFQUESTIONNAIRE

SCALE PERCENTAGES %0 0

0-4 104-8 208-12 30

12-16 4016-20 5020-24 6024-28 7028-31 8031-33 9033-36 100

SCALE PERCENTAGES %

0 01 102 203 304 405 506 607 708 809 90

10-13 100


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D) MEASUREMENT SCALE FOR MEMBERS ANALYSIS OF QUESTIONNAIRE

SCALE PERCENTAGES %0 0

0-5 55-10 10

10-15 1515-20 2020-25 2525-30 3030-35 3535-40 4040-45 45

45-50 5050-55 5555-60 6060-65 6565-70 7070-75 7575-80 8080-85 8585 -90 9090-95 95

95-100 100

APPENDIX 2:


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Interview questions directed to Board members:

1) What are the conditions for becoming a member of BAPCCUL credit union?

2) What are the conditions for members to become Board members?

3) When are elections for Board members due?

4) How long can each Director stay in the Board?

5) How can a board member become a President or Vice President of the BAPC CUL?

6) How many committees are present in the BAPCCUL?

7) Can you explain precisely the function of each committee?8) How many members are present in each committee?

9) How many workshops and seminars have been held in the past two years?

10) What were the workshops about?

11) Did you participate in the workshops?

12) Is there any succession planning for the Board President, Board members and committeemembers?

13) What information does the company provide to the members apart from the balancesheets and income statements?

14) Does the company have a risk management system for identification and analysis of business risk?

15) Is there any system in place to evaluate the Boards performance? Who evaluates their performance?

16) How are the directors remunerated? Do they participate in deciding their remuneration?

APPENDIX 3:

BOARD OF DIRECTORS AND COMMITTEE MEMBERS


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MEMBER SHEY SANTE AUGUSTINE

MEMBER MR. NFI JOSEPH LON

EDUCATION COMMITTEE 2009

CHAIRPERSON MRS TUMASANG FLORENCE

MEMBER MR NKERBU LAMNZAM ELKANAH

MEMBER MRS ASANA FELISISA AKWESEH


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Hierarchy Accountability Chart of BAPCCUL

Admin clerk

Supervisorycommittee

Board ofdirectors

Creditcommittee

Womencommittee

Educationcommittee

General meetin

MANAGER

Management IMF

s stem

Education andPR officer

Senior

accountantLoan officer

Loan clerk

Account clerk Cashier Office clerk

Assistant public relation officer

Assistant manager


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GLOSSARY

ACCA : Association of Chartered Certified Accountant.

Audit (n): The examination of the books and accounts of a company.

Audit committee (n): A committee of a companys board of directors that monitors finances,on which the companys Executives cannot sit.

Auditor (n): A person who audits.

Board members (n): A group of directors elected by the members to run the company.

CAMCCUL: Cameroon Cooperative Credit Union League.

COBAC: Commission Bancaire de l'Afrique Centrale.

Combined Code: A principle-based approach of corporate governance used in the UK.

Community: A group of people living in a particular local area.

Corporate governance: The way an organization is run, including the power of the Board ofDirectors, audit committee, ethics treatment of workers, salaries etc.

Credit risk : Risk that a borrower may not be able to repay his loan.

Credit union (n): A group of people who pay in regular deposits or subscription, which earninterest, that are use to give loans to others.

Director: A member appointed by other members to run the company or sit at thecommittees of the company.

Ethical code: A system of principles governing morality and acceptable conduct.

Executive Director: Director that pays full time attention to the work of the company.

Foreign exchange risk : Risk resulting from the change in the price of foreign currency.

Independent: That all matters relating to the assignment and independence in mental attitudeare to be maintained by the auditors. This means freedom from bias, which is possible evenwhen auditing one's own business (independence in fact). It is important that the auditor beindependent in appearance (that others believe the auditor is independent).

Internal control: Internal control policies and procedures are designed to provide reasonableassurance that specific entity objectives will be achieved. It consists of the control


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environment, risk assessment, control activities, information and communications, and monitoring .

Internet: A computer network consisting of computer networks that use TCP/IP protocols tofacilitate data transmission and exchanges.

Liquidity risk: A risk that a depository institution will not have sufficient cash or liquidassets to meet borrower and depositor demand.

Nomination committee: A committee involved in nominating directors for control of thecompany.

OECD: Organization for Economic Cooperation and Development.

Population: The complete set of things we want to investigate.

Primary source: A document or physical object which was written or created during thetime under study. These sources were present during an experience or time period and offeran inside view of a particular event.

Random sample (random-number sampling): Identical probability of each population item being selected for a sample. Also, the use of random numbers to select a random sample froma population.

Remuneration committee: A committee involved in determining the salary and bonuses ofDirectors.

Respondents: Those who answered the questions in the questionnaire.

Risk: A chance of something happening that will have an impact on the business objective.

Sample: A subset of the population that is a smaller number of items picked from the population.

Sarbanes-Oxley: An act established by the Public Company Accounting Oversight Board

that added requirements for publicly traded companies, their officers, boards and auditors. Itincreased penalties for corporate financial fraud.

Secondary source: A secondary source interprets and analyzes primary sources. Thesesources are one or more steps removed from the event. Secondary sources may have pictures,quotes or graphics of primary sources in them.

Shareholder: A person who owns shares of a company.

Stakeholder: Someone who can influence or be influenced by a companys decisions.


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Strategic risk: Risk due to weak governance, weak leadership, poor strategic relations,regulatory and administrative reasons.

Skills: The ability to do something or make use of knowledge.

Non executive board members: Members who are not involved in the daily management ofthe company but are present in the committees.

Operational risk: failure of internal system, processes, technology, humans or external parties.

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