title: Te whakaako i te reo Māori i te kura auraki tuarua i Aotearoa nei: Kei tua o te awe māpere. The teaching of te reo Māori in English-medium secondary schools in New Zealand: Beyond the mask.

authors: Nock, Sophie

subjects: language curricula

abstract: He taonga te reo Māori nō tuawhakarere, nō tuauriuri, whāioio, nā te atua i homai kia poipoia e te iwi Māori hei reo kōrero mō te hunga kaingākau, mō te hunga kāore anō kia whānau noa.  Ahakoa ia he toimaha tonu te hauora o te reo Māori, nā te mahi tūkino (a ētahi).  I roto i ngā tau whā tekau kua ara ake ngā momo rongoā hei whakahauora, hei whakatairanga i te reo Māori, nā, ko Te Kōhanga Reo tērā, ko te Kura Kaupapa Māori tērā, ko Te Wharekura tērā, aha atu, aha atu.  Ka mutu, i te tau 1987 i whakamanahia ai te reo Māori hei reo tūturu o tēnei whenua.  Ahakoa he aha e mea ana te Tāhūhū o te Mātauranga ehara i te mea me whai wāhi te reo Māori hei reo ako i roto i ngā kura tuarua puta noa i te motu.  Engari, ko te raruraru kua whai wāhi kē ētahi atu reo o te ao, kaua ko te reo Māori.  Kāti, i te tau 2009 i tatū ai Te Aho Arataki Marau mō te Ako i Te Reo Māori, ā, ki reira whai wāhi ai te reo Māori.  Nā, ko tā te kura tuarua mahi he tautoko mārika i te reo Māori, mā te whakaako i te reo Māori, e tika ana me pērā, nā te mea, ko te nuinga o ngā tamariki Māori e haere ana ki a ia ako ai.  Mōhio pai i whakapeto ngoi ngā kaiwhakaako reo Māori me te matatau anō o ētahi ki te reo hoki, engari, ki tā te pūrongo rangahau a Te Tari Arotake Mātauranga kīhai i tino eke panuku ngā mahi whakaako.  Ko ngā tino take, ko te whakangungu kaiwhakaako, ko te tautoko me te whakahaere a te kura hoki.

Nō reira, ko te whāinga matua o tēnei rangahau kia tirohia me pēhea e whakaako ai te reo Māori ki te kura tuarua, (kaua i ngā wharekura) i Aotearoa.  Mai i te rau tau tekau mā waru ka tātaria ētahi o ngā kōrero whanake e hāngai pū ana ki te whakaako me te ako i (t)ētahi atu reo, ko ia te wāhanga tuarua.  Whai muri mai i tērā (kei te wāhanga tuatoru) ko ngā patapatai me ngā uiuitanga, ā, ko tā te patapatai he kukume mai i ngā whakapono, i ngā whakaaro, i ngā waiaro o te hunga kaiwhakaako, ko tā te uiuitanga e whakatātūtū i te rētotanga o te kaupapa.  Ka mutu, i whārikihia ngā whakakitenga, ngā whakahoki kōrero ki taua wāhanga.  I te mutunga iho i whakapau kaha ngā kaiwhakaako ki te whakatutuki i ngā mahi, ahakoa ngā piki me ngā heke.  Kei ngā wāhanga e rua (4 & 5) ngā kōrero mō ngā tūmomo rauemi e whakamahia ana e ngā kaiwhakaako, arā, ko ngā momo pukapuka (4) me ngā tūmomo rauemi o te ipurangi nā Te Tāhūhū o te Mātauranga i whakarato (5).  E kī ana ngā whakaputanga, tuatahi, kīhai aua rauemi i tino whakaatu mai i ngā momo whanaketanga i roto i ngā tau whā tekau neke atu mō te whakaako i te reo tuarua, hou rānei, tuarua, kāhore hoki i tino hāngai pū ēnei rauemi ki te Marau mō te Ako i Te Reo Māori i te kura tuarua me te hāngai anō hoki ki te āhua o te whakaako i te reo mā te ‘Communicative Language Teaching’.  Hei whaiwhai ake i ngā rauemi i tātaria ētahi o ngā karaehe reo (te wāhanga 6) mā ngā wehewehetanga matua o te whakaako reo.  Mai i taua tātaritanga i kitea mai ētahi raruraru, tuatahi, kāhore ngā tauira/akonga i whai wāhi ki te kōrero (i roto tonu i te karaehe), tuarua, kāhore e taea te whakawhitiwhiti kōrero ki a rātou anō, tuatoru, kāhore rātou i te mahi tahi anō hoki.  Hei whakakapi ake i tēnei rangahau, kei te wāhanga whakamutunga (7) te whakakaokao mai o ngā whakakitenga katoa, me te whakatakoto o ngā tūtohutanga kia anga whakamua ai. 

It has been acknowledged that te reo Māori is a taonga and, as such, is subject to the protections guaranteed under the terms of Te Tiriti o Waitangi.  Since 1987, it has been an official language of Aotearoa.  Its future is, however, very far from secure and instructed language learning continues to play a significant part in the revitalisation agenda.  Even so, although schools are now required to offer a language other than the language of instruction to pupils in Years 7 to 10, and although over two thirds of Māori students currently attend schools in which English is the main language of instruction, schools are not required to include te reo Māori in their language offering.  In addition, although curriculum guidelines documents for a number of foreign languages have been available for many years, it was not until 2009 that the final version of a curriculum guidelines document for the teaching and learning of te reo Māori in English-medium schools became available.  Furthermore, while there clearly are some extremely competent teachers of the language, Education Review Office (ERO) reports indicate that all is not well so far as the teaching and learning of te reo Māori in English-medium secondary schools is concerned.  The problems identified relate not to teachers' proficiency in the language but to their limited pedagogical knowledge.  As ERO has indicated, this raises questions about the initial training of teachers of te reo Māori and the ways in which all schools manage and support them. 

The overall aim of the research reported here is to investigate the teaching of te reo Māori in English-medium secondary schools in Aotearoa.  Following a critical review of selected literature on developments in the teaching and learning of additional languages since the end of the 18th Century (Chapter 2), there is a report on a survey (involving questionnaire responses and semi-structured interviews) of a sample of teachers of te reo Māori in English-medium secondary schools.  That survey focuses on their educational and linguistic backgrounds and their attitudes and approaches to a range of issues associated with the teaching and learning of the language in school settings (Chapter 3).  Overall, the findings indicate that while these teachers are doing their best to provide a high quality educational experience for their students, they are doing so in the face of a number of significant barriers relating, in particular, to the limited nature of the pre-service training they have received, and the range of additional duties they are expected to perform.  In addition, the survey revealed some concerns about the impact of national assessment on teaching and learning and about the teaching materials and resources that are available.  The next two chapters report on the analysis of a sample of textbooks which are widely used in secondary schools (Chapter 4) and a sample of resources made available by the Ministry of Education (Chapter 5), the main findings being that these are, in the main, (a) inconsistent with both research-based developments in the teaching of additional languages and the expectations relating to communicative language teaching as outlined in the curriculum guidelines, and (b) that these resources do not align with the new curriculum.  The analysis of a sample of lessons taught in secondary schools follows (Chapter 6).  That analysis, conducted in relation to a number of focus points, reveals some significant problems, including the fact that the students were provided with few opportunities to contribute, to interact with one another, and to engage in genuinely communicative activities.  The final chapter (Chapter 7) provides an overview of the findings and includes some suggestions about a possible way forward.

text: Te whakaako i te reo Māori i te kura auraki tuarua i Aotearoa nei: Kei tua o te awe māpere. The teaching of te reo Māori in English-medium secondary schools in New Zealand: Beyond the mask. He taonga te reo Māori nō tuawhakarere, nō tuauriuri, whāioio, nā te atua i homai kia poipoia e te iwi Māori hei reo kōrero mō te hunga kaingākau, mō te hunga kāore anō kia whānau noa.  Ahakoa ia he toimaha tonu te hauora o te reo Māori, nā te mahi tūkino (a ētahi).  I roto i ngā tau whā tekau kua ara ake ngā momo rongoā hei whakahauora, hei whakatairanga i te reo Māori, nā, ko Te Kōhanga Reo tērā, ko te Kura Kaupapa Māori tērā, ko Te Wharekura tērā, aha atu, aha atu.  Ka mutu, i te tau 1987 i whakamanahia ai te reo Māori hei reo tūturu o tēnei whenua.  Ahakoa he aha e mea ana te Tāhūhū o te Mātauranga ehara i te mea me whai wāhi te reo Māori hei reo ako i roto i ngā kura tuarua puta noa i te motu.  Engari, ko te raruraru kua whai wāhi kē ētahi atu reo o te ao, kaua ko te reo Māori.  Kāti, i te tau 2009 i tatū ai Te Aho Arataki Marau mō te Ako i Te Reo Māori, ā, ki reira whai wāhi ai te reo Māori.  Nā, ko tā te kura tuarua mahi he tautoko mārika i te reo Māori, mā te whakaako i te reo Māori, e tika ana me pērā, nā te mea, ko te nuinga o ngā tamariki Māori e haere ana ki a ia ako ai.  Mōhio pai i whakapeto ngoi ngā kaiwhakaako reo Māori me te matatau anō o ētahi ki te reo hoki, engari, ki tā te pūrongo rangahau a Te Tari Arotake Mātauranga kīhai i tino eke panuku ngā mahi whakaako.  Ko ngā tino take, ko te whakangungu kaiwhakaako, ko te tautoko me te whakahaere a te kura hoki.

Nō reira, ko te whāinga matua o tēnei rangahau kia tirohia me pēhea e whakaako ai te reo Māori ki te kura tuarua, (kaua i ngā wharekura) i Aotearoa.  Mai i te rau tau tekau mā waru ka tātaria ētahi o ngā kōrero whanake e hāngai pū ana ki te whakaako me te ako i (t)ētahi atu reo, ko ia te wāhanga tuarua.  Whai muri mai i tērā (kei te wāhanga tuatoru) ko ngā patapatai me ngā uiuitanga, ā, ko tā te patapatai he kukume mai i ngā whakapono, i ngā whakaaro, i ngā waiaro o te hunga kaiwhakaako, ko tā te uiuitanga e whakatātūtū i te rētotanga o te kaupapa.  Ka mutu, i whārikihia ngā whakakitenga, ngā whakahoki kōrero ki taua wāhanga.  I te mutunga iho i whakapau kaha ngā kaiwhakaako ki te whakatutuki i ngā mahi, ahakoa ngā piki me ngā heke.  Kei ngā wāhanga e rua (4 & 5) ngā kōrero mō ngā tūmomo rauemi e whakamahia ana e ngā kaiwhakaako, arā, ko ngā momo pukapuka (4) me ngā tūmomo rauemi o te ipurangi nā Te Tāhūhū o te Mātauranga i whakarato (5).  E kī ana ngā whakaputanga, tuatahi, kīhai aua rauemi i tino whakaatu mai i ngā momo whanaketanga i roto i ngā tau whā tekau neke atu mō te whakaako i te reo tuarua, hou rānei, tuarua, kāhore hoki i tino hāngai pū ēnei rauemi ki te Marau mō te Ako i Te Reo Māori i te kura tuarua me te hāngai anō hoki ki te āhua o te whakaako i te reo mā te ‘Communicative Language Teaching’.  Hei whaiwhai ake i ngā rauemi i tātaria ētahi o ngā karaehe reo (te wāhanga 6) mā ngā wehewehetanga matua o te whakaako reo.  Mai i taua tātaritanga i kitea mai ētahi raruraru, tuatahi, kāhore ngā tauira/akonga i whai wāhi ki te kōrero (i roto tonu i te karaehe), tuarua, kāhore e taea te whakawhitiwhiti kōrero ki a rātou anō, tuatoru, kāhore rātou i te mahi tahi anō hoki.  Hei whakakapi ake i tēnei rangahau, kei te wāhanga whakamutunga (7) te whakakaokao mai o ngā whakakitenga katoa, me te whakatakoto o ngā tūtohutanga kia anga whakamua ai. 

It has been acknowledged that te reo Māori is a taonga and, as such, is subject to the protections guaranteed under the terms of Te Tiriti o Waitangi.  Since 1987, it has been an official language of Aotearoa.  Its future is, however, very far from secure and instructed language learning continues to play a significant part in the revitalisation agenda.  Even so, although schools are now required to offer a language other than the language of instruction to pupils in Years 7 to 10, and although over two thirds of Māori students currently attend schools in which English is the main language of instruction, schools are not required to include te reo Māori in their language offering.  In addition, although curriculum guidelines documents for a number of foreign languages have been available for many years, it was not until 2009 that the final version of a curriculum guidelines document for the teaching and learning of te reo Māori in English-medium schools became available.  Furthermore, while there clearly are some extremely competent teachers of the language, Education Review Office (ERO) reports indicate that all is not well so far as the teaching and learning of te reo Māori in English-medium secondary schools is concerned.  The problems identified relate not to teachers' proficiency in the language but to their limited pedagogical knowledge.  As ERO has indicated, this raises questions about the initial training of teachers of te reo Māori and the ways in which all schools manage and support them. 

The overall aim of the research reported here is to investigate the teaching of te reo Māori in English-medium secondary schools in Aotearoa.  Following a critical review of selected literature on developments in the teaching and learning of additional languages since the end of the 18th Century (Chapter 2), there is a report on a survey (involving questionnaire responses and semi-structured interviews) of a sample of teachers of te reo Māori in English-medium secondary schools.  That survey focuses on their educational and linguistic backgrounds and their attitudes and approaches to a range of issues associated with the teaching and learning of the language in school settings (Chapter 3).  Overall, the findings indicate that while these teachers are doing their best to provide a high quality educational experience for their students, they are doing so in the face of a number of significant barriers relating, in particular, to the limited nature of the pre-service training they have received, and the range of additional duties they are expected to perform.  In addition, the survey revealed some concerns about the impact of national assessment on teaching and learning and about the teaching materials and resources that are available.  The next two chapters report on the analysis of a sample of textbooks which are widely used in secondary schools (Chapter 4) and a sample of resources made available by the Ministry of Education (Chapter 5), the main findings being that these are, in the main, (a) inconsistent with both research-based developments in the teaching of additional languages and the expectations relating to communicative language teaching as outlined in the curriculum guidelines, and (b) that these resources do not align with the new curriculum.  The analysis of a sample of lessons taught in secondary schools follows (Chapter 6).  That analysis, conducted in relation to a number of focus points, reveals some significant problems, including the fact that the students were provided with few opportunities to contribute, to interact with one another, and to engage in genuinely communicative activities.  The final chapter (Chapter 7) provides an overview of the findings and includes some suggestions about a possible way forward.

year: 2014

title: Talking About Race and Positionality in Psychology: Asians as Tangata Tiriti

authors: Tan, Kyle K. H.

subjects: tangata whenua

abstract: The article discusses the dominance of Western, educated, industrialized, rich, and democratic (WEIRD) perspectives in the field of psychology in Aotearoa New Zealand. This has resulted in a racial hierarchy of knowledge, with Indigenous and culturally diverse epistemologies marginalized. The lack of diversity in the curriculum and the limited representation of non-Pākehā (non-New Zealand European) psychologists in the country have led to calls for a more inclusive environment.

The first perspective proposed is to understand Asians as a racialized group with diverse experiences. Asians in Aotearoa come from various backgrounds and face different degrees of racism and acculturation. The notion of 'Asian' may be used to marginalize the interests of Māori, perpetuating institutional racism. The concept of 'Asianisations' describes different forms of racial marginalization experienced by Asians in the country.

The second perspective emphasizes the positionality of Asians as tangata Tiriti (people of the Treaty). Te Tiriti o Waitangi, the Treaty between the British Crown and Māori chiefs, is seen as granting tangata Tiriti equal rights and privileges alongside Pākehā and Māori. As tangata Tiriti, Asians have a responsibility to uphold Tiriti principles, which include partnership, active protection, equity, and options to address Māori inequities. Asian psychologists can engage in culturally safe care for Māori clients and collaborate with and empower Māori leadership in research.

The article highlights the need for Asian psychologists to reflect on their positionality, power structures, and biases within the discipline and society. It encourages them to challenge the dominance of WEIRD psychology and work towards decolonizing the field. By doing so, they can contribute to the flourishing of Kaupapa Māori psychology and develop culturally informed practices that draw on the richness of Asian cultures.

text: Talking About Race and Positionality in Psychology: Asians as Tangata Tiriti The article discusses the dominance of Western, educated, industrialized, rich, and democratic (WEIRD) perspectives in the field of psychology in Aotearoa New Zealand. This has resulted in a racial hierarchy of knowledge, with Indigenous and culturally diverse epistemologies marginalized. The lack of diversity in the curriculum and the limited representation of non-Pākehā (non-New Zealand European) psychologists in the country have led to calls for a more inclusive environment.

The first perspective proposed is to understand Asians as a racialized group with diverse experiences. Asians in Aotearoa come from various backgrounds and face different degrees of racism and acculturation. The notion of 'Asian' may be used to marginalize the interests of Māori, perpetuating institutional racism. The concept of 'Asianisations' describes different forms of racial marginalization experienced by Asians in the country.

The second perspective emphasizes the positionality of Asians as tangata Tiriti (people of the Treaty). Te Tiriti o Waitangi, the Treaty between the British Crown and Māori chiefs, is seen as granting tangata Tiriti equal rights and privileges alongside Pākehā and Māori. As tangata Tiriti, Asians have a responsibility to uphold Tiriti principles, which include partnership, active protection, equity, and options to address Māori inequities. Asian psychologists can engage in culturally safe care for Māori clients and collaborate with and empower Māori leadership in research.

The article highlights the need for Asian psychologists to reflect on their positionality, power structures, and biases within the discipline and society. It encourages them to challenge the dominance of WEIRD psychology and work towards decolonizing the field. By doing so, they can contribute to the flourishing of Kaupapa Māori psychology and develop culturally informed practices that draw on the richness of Asian cultures.

year: 2023-07-24

title: Corporate Governance and Performance of Microfinance Institutions (MFIs): A Comparative Study in Sri Lanka and India

authors: Thrikawala, Sujani Sudhara

subjects: Corporate Governance

abstract: This thesis investigates the impact of corporate governance practices on financial performance and outreach of microfinance institutions (MFIs) in Sri Lanka and India. Guidance and principles developed from prior research which has predominantly focussed on corporate governance relating to corporations in mature financial markets may not be efficacious. There is a need for a more specific approach to identify better governance structures for the microfinance sector which will support MFIs to attain long-term sustainability of the industry. In order to contribute to this debate, this research examines (i) the relationship between corporate governance practices, financial performance and outreach of Sri Lankan MFIs (ii) the relationship between corporate governance practices, financial performance and outreach of Indian MFIs (iii) MFIs’ corporate governance and performance differences between Sri Lanka and India and (iv) the relationship between corporate governance and performance of MFIs based on a combined sample and considering the influence of national governance quality.
A study of corporate governance in the microfinance sector is timely and important as unfair practice accusations against MFIs raise questions around what is an appropriate framework for monitoring and control of MFI activities. A well-structured corporate governance practice may reduce the impact of corruption and undue bureaucracy by increasing transparency and accountability of funds utilised in microfinance activities. Even though studies of corporate governance and firm performance in mature markets are largely and rapidly evolving, their impact on MFI performance is little researched and reported. It is argued that MFIs which maintain good corporate governance practices will be financially and socially sustainable.
This thesis makes a number of contributions to the existing knowledge of corporate governance and MFI performance in several ways. First, it provides evidence from Sri Lanka and India of what aspects of corporate governance need to be strengthened and how much impact each individual component has on MFI financial performance and outreach. Second, the study identifies the importance of considering differences in institutional values, culture, and the environment of each country and points to the risk of applying normative assertions of corporate governance practices in the microfinance sector. Third, this study, through careful diagnostic testing, uses microeconometric techniques to control endogeneity which may have negated some findings reported in the literature. In particular, unobserved heterogeneity, simultaneity and dynamic endogeneity inherent in the corporate governance–performance relationship studies are eliminated. Finally, in contrast to extant studies in the microfinance sector, this is the first direct study to accommodate corporate governance, financial performance and outreach of MFIs in both Sri Lanka and India. The impact of cross-country differences in government effectiveness, regulatory quality and rule of law on MFI performance is also considered.
Data needed to test various hypotheses are sourced from the Microfinance Information Exchange (MIX) database, Lanka Microfinance Practitioners' Association (LMFPA) in Sri Lanka and Sa-Dhan, the microfinance network in India. Furthermore, firm-level corporate governance data are collected from the individual institutions by going through their annual reports, individual firm websites and through personally contacting the individual firms. The sample period for the Sri Lankan and Indian MFIs is 2007 to 2012. Fixed-effect, random-effect and system generalised method of moment (GMM) estimator approaches are used to answer the research questions.
In Sri Lanka, female CEO, female chair, larger boards, client representatives on board and internal audit function improve the financial performance of MFIs. When there are more female directors and more international/donor representatives on a board, financial performance declines. The outreach of Sri Lankan MFIs improves when there are more international/donor representatives and fewer client representatives on boards.
In the Indian context, the results indicate that international/donor representatives, client representatives and outside directors on board, and an internal audit function statistically significantly positively correlate with financial performance of MFIs. For female chair and number of female directors on the board there is a negative correlation. However, in India, better outreach can be achieved when there is a female chair and when there are more female directors and more international/donor agencies representatives on the board. Female CEOs and larger boards appear to have negative effect on MFI outreach.
The findings from Sri Lankan MFIs support the prediction of agency theory regarding the effective monitoring impact the performance of MFIs. But it is contrary to the number of board members as larger boards positively associate with MFI financial performance. This is consistent with resource dependency theory as larger boards provide a wide range of expertise and resources for the institution. In a voluntary organisation costs are reduced when board members are involved in a range of activities or functions that might otherwise have been covered by paid staff. This is also a way of aligning board members with senior management. The issue that arises is the extent to which this goal congruence is tilted toward management aspirations and produces a shadow agency cost. Even though agency theory emphasises the negative impact of duality, from the findings of this study it is difficult to make inferences about the separation of CEO and chair is better for MFI financial performance as well as there is no impact for MFI outreach. Findings of Indian analysis are also consistent with the perspectives of agency theory to a large extent, as diversified boards improve MFI financial performance. Similar to Sri Lanka, CEO/chair duality has no effect on MFI financial performance or outreach, which is not consistent with the predictions of agency theory.
Importantly, the results of this study suggest that the impact of corporate governance on MFI performance persists in both countries even after the dynamic nature of the corporate governance and performance relationship is taken into consideration. Financial performance of both countries is improved with larger boards with more client representation. For both countries, more female representatives and outside directors on the board and internal audit function negatively affect MFI financial performance. Outreach in both countries is enhanced with more international/donor representative and fewer outside directors.
Notably, the findings of this study indicate that the relationship between current MFI performance and past (one-year lagged) performance is statistically significantly positive for financial performance and outreach variables in both countries, suggesting that the corporate governance – performance relationship of MFIs should be examined in a dynamic framework. This highlights the importance of considering the past performance as an independent variable for current corporate governance and performance studies in the microfinance sector. Furthermore, this study shows the quality of national governance has a statistically significantly positive effect on financial performance and outreach of MFIs in both countries.
This research demonstrates that corporate governance practices in for-profit companies have some synergies with the microfinance industry. The results reported in this study reflect a deeper commitment to robustness and micro econometric issues than previous studies and this robustness provides a platform for industry and political policy developments that can significantly enhance the quality of life for the poorest and low income people in Sri Lanka and India. The opportunities for microfinance to make a significant difference to the poorest of the poor in low income countries and emerging economies are not waning. Further research in other countries is required to establish if this is a generalisable trend or unique to Sri Lanka and India.
Finally, this research recommends that it is possible to improve corporate governance practices of MFIs in Sri Lanka and India by promulgating a regulatory and supervisory system. The sector needs a strong regulatory framework to strengthen its governance and institutional structures, and to enhance opportunities for the sustainability and development of the microfinance industry.

text: Corporate Governance and Performance of Microfinance Institutions (MFIs): A Comparative Study in Sri Lanka and India This thesis investigates the impact of corporate governance practices on financial performance and outreach of microfinance institutions (MFIs) in Sri Lanka and India. Guidance and principles developed from prior research which has predominantly focussed on corporate governance relating to corporations in mature financial markets may not be efficacious. There is a need for a more specific approach to identify better governance structures for the microfinance sector which will support MFIs to attain long-term sustainability of the industry. In order to contribute to this debate, this research examines (i) the relationship between corporate governance practices, financial performance and outreach of Sri Lankan MFIs (ii) the relationship between corporate governance practices, financial performance and outreach of Indian MFIs (iii) MFIs’ corporate governance and performance differences between Sri Lanka and India and (iv) the relationship between corporate governance and performance of MFIs based on a combined sample and considering the influence of national governance quality.
A study of corporate governance in the microfinance sector is timely and important as unfair practice accusations against MFIs raise questions around what is an appropriate framework for monitoring and control of MFI activities. A well-structured corporate governance practice may reduce the impact of corruption and undue bureaucracy by increasing transparency and accountability of funds utilised in microfinance activities. Even though studies of corporate governance and firm performance in mature markets are largely and rapidly evolving, their impact on MFI performance is little researched and reported. It is argued that MFIs which maintain good corporate governance practices will be financially and socially sustainable.
This thesis makes a number of contributions to the existing knowledge of corporate governance and MFI performance in several ways. First, it provides evidence from Sri Lanka and India of what aspects of corporate governance need to be strengthened and how much impact each individual component has on MFI financial performance and outreach. Second, the study identifies the importance of considering differences in institutional values, culture, and the environment of each country and points to the risk of applying normative assertions of corporate governance practices in the microfinance sector. Third, this study, through careful diagnostic testing, uses microeconometric techniques to control endogeneity which may have negated some findings reported in the literature. In particular, unobserved heterogeneity, simultaneity and dynamic endogeneity inherent in the corporate governance–performance relationship studies are eliminated. Finally, in contrast to extant studies in the microfinance sector, this is the first direct study to accommodate corporate governance, financial performance and outreach of MFIs in both Sri Lanka and India. The impact of cross-country differences in government effectiveness, regulatory quality and rule of law on MFI performance is also considered.
Data needed to test various hypotheses are sourced from the Microfinance Information Exchange (MIX) database, Lanka Microfinance Practitioners' Association (LMFPA) in Sri Lanka and Sa-Dhan, the microfinance network in India. Furthermore, firm-level corporate governance data are collected from the individual institutions by going through their annual reports, individual firm websites and through personally contacting the individual firms. The sample period for the Sri Lankan and Indian MFIs is 2007 to 2012. Fixed-effect, random-effect and system generalised method of moment (GMM) estimator approaches are used to answer the research questions.
In Sri Lanka, female CEO, female chair, larger boards, client representatives on board and internal audit function improve the financial performance of MFIs. When there are more female directors and more international/donor representatives on a board, financial performance declines. The outreach of Sri Lankan MFIs improves when there are more international/donor representatives and fewer client representatives on boards.
In the Indian context, the results indicate that international/donor representatives, client representatives and outside directors on board, and an internal audit function statistically significantly positively correlate with financial performance of MFIs. For female chair and number of female directors on the board there is a negative correlation. However, in India, better outreach can be achieved when there is a female chair and when there are more female directors and more international/donor agencies representatives on the board. Female CEOs and larger boards appear to have negative effect on MFI outreach.
The findings from Sri Lankan MFIs support the prediction of agency theory regarding the effective monitoring impact the performance of MFIs. But it is contrary to the number of board members as larger boards positively associate with MFI financial performance. This is consistent with resource dependency theory as larger boards provide a wide range of expertise and resources for the institution. In a voluntary organisation costs are reduced when board members are involved in a range of activities or functions that might otherwise have been covered by paid staff. This is also a way of aligning board members with senior management. The issue that arises is the extent to which this goal congruence is tilted toward management aspirations and produces a shadow agency cost. Even though agency theory emphasises the negative impact of duality, from the findings of this study it is difficult to make inferences about the separation of CEO and chair is better for MFI financial performance as well as there is no impact for MFI outreach. Findings of Indian analysis are also consistent with the perspectives of agency theory to a large extent, as diversified boards improve MFI financial performance. Similar to Sri Lanka, CEO/chair duality has no effect on MFI financial performance or outreach, which is not consistent with the predictions of agency theory.
Importantly, the results of this study suggest that the impact of corporate governance on MFI performance persists in both countries even after the dynamic nature of the corporate governance and performance relationship is taken into consideration. Financial performance of both countries is improved with larger boards with more client representation. For both countries, more female representatives and outside directors on the board and internal audit function negatively affect MFI financial performance. Outreach in both countries is enhanced with more international/donor representative and fewer outside directors.
Notably, the findings of this study indicate that the relationship between current MFI performance and past (one-year lagged) performance is statistically significantly positive for financial performance and outreach variables in both countries, suggesting that the corporate governance – performance relationship of MFIs should be examined in a dynamic framework. This highlights the importance of considering the past performance as an independent variable for current corporate governance and performance studies in the microfinance sector. Furthermore, this study shows the quality of national governance has a statistically significantly positive effect on financial performance and outreach of MFIs in both countries.
This research demonstrates that corporate governance practices in for-profit companies have some synergies with the microfinance industry. The results reported in this study reflect a deeper commitment to robustness and micro econometric issues than previous studies and this robustness provides a platform for industry and political policy developments that can significantly enhance the quality of life for the poorest and low income people in Sri Lanka and India. The opportunities for microfinance to make a significant difference to the poorest of the poor in low income countries and emerging economies are not waning. Further research in other countries is required to establish if this is a generalisable trend or unique to Sri Lanka and India.
Finally, this research recommends that it is possible to improve corporate governance practices of MFIs in Sri Lanka and India by promulgating a regulatory and supervisory system. The sector needs a strong regulatory framework to strengthen its governance and institutional structures, and to enhance opportunities for the sustainability and development of the microfinance industry.

year: 2016