Ethics Policy and Risk Mitigation in Commercial Banks in Uganda

Abstract

The current study set out to explore the contribution of ethics policy on risk mitigation. The study has revealed that commercial banks in Uganda have risks in areas of credit, liquidity, market, operations, compliance, taxation, and reputations. The results further revealed that ethics policy had a significant relationship with compliance [r (48) = .318, p<0.05]. Similarly compliance also significantly related to risk mitigation [r (48) =.437, p<0.01]. There was also a strong relationship between ethics policy and risk mitigation [r (48) =.380, p<0.01]. The causal effect of ethics policy on risk mitigation came out as 51%. In order to have effective risk mitigation, ethics training was proposed. A simulation should that if bank employees were given ethics training, mitigating risks in the commercial bank would improve up to 70%.

Keywords: Ethics policy, risk mitigation, commercial banks, Uganda