Internal Controls and Double-Bottom-Line Performance in Ghanaian Cooperative Financial Institutions: Moderated by Firm Characteristics

Abstract

Purpose: This research investigates the impact of internal control systems on double-bottom-line (DBL) performance of Ghana's cooperative financial institutions (CFIs) with emphasis on firm-level determinants moderating the impact, namely firm size and age. Methodology: With the help of a survey-based measurement instrument, data were obtained from 207 approved financial cooperatives and credit unions that were operating in Ghana's ten former administrative regions. The study used Partial Least Squares Structural Equation Modeling (PLS-SEM) to study how social performance, internal control practices, and financial performance correlate with each other. Findings: The financial performance is influenced directly by internal controls, whereas social performance is influenced depending on the size and age of the company. The older and larger CFIs reported stronger relationships between DBL performance and internal control strength. The study adds to the scant empirical evidence on cooperative finance in sub-Saharan Africa by bringing together internal control arrangements with the DBL performance framework. Unique Contribution to Theory, Practice and Policy: The study provides pertinent policy lessons for regulators and practitioners, including the need for customized supervision, capacity development, and differential compliance procedures in support of inclusive financial development and governance at CFIs