In a corporation, management is employed by owners for specified functions from which utility of owners and management is to be derived. While executing their roles and obligations, management may consider fulfilling their interests at the expense of owners’ interests and vice versa. This results into agency problems. This study tests the relevance of the agency theory and examines whether existing governance mechanisms and ownership structure address agency problems in Savings and Credit Cooperatives (SACCOs) in Uganda. To accomplish this, a mixed research (both quantitative and qualitative) design is used. Self-administered questionnaire and personal interviews about: utility of owners and management, and governance mechanisms and ownership structure are administered onto the respondents-key informants-selected through stratified sampling of SACCOs in Uganda. Respondents’ perceptions about utility levels of owners and management, and governance mechanisms and ownership structure within the studied SACCOs; are analyzed using a 5-point Likert scale. From a sample of 252 SACCOs with minimum of 10 years of experience; by regional concentration; majority SACCOS (40%) are in Western Uganda followed by Central region (29%), Eastern (20%) and lastly Northern region (11%). Over 78% have membership of over 1000 shareholders. By level of education, majority management board members (65.1%) have a minimum of degree as academic qualification; with male gender dominance (91.7%). The computed average welfare index for SACCO owners is 4=disagree (=bad welfare). The computed average welfare index for SACCO management is 2.7=agree (=good welfare). This shows divergence in achieving agent-principal objectives; a signal to existence of agency problem against the SACCO owners. Examining whether governance mechanisms and ownership structure impacts on SACCOs’ problems, five corporate governance mechanisms: board size, CEO/chairman duality, independence of the board, remuneration of the board, and presence of an audit committee are used in evaluating probability of having agency problems within SACCOs. Experience/age and size of the SACCO are used as control variables. On corporate governance mechanisms, generally SACCOs have: less CEO duality, bigger size of the board (above 6 members), more non-executive directors, higher board remuneration, and majority have audit committees. The marginal effects from the probit regression indicate that mechanisms that have reduced agency problems with in SACCOs are: existing Board remuneration, board size, independence of non-executive directors, and presence of audit committees.

Keywords: Corporate governance; Agency theory; SACCOs in Uganda