www.ijird.com June, 2021 Vol 10 Issue 6 INTERNATIONAL JOURNAL OF INNOVATIVE RESEARCH & DEVELOPMENT DOI No. : 10.24940/ijird/2021/v10/i6/JUN21026 Page 71 Corporate Governance and Implementation of Financial Management Practices in Financial Institutions of the Federal Government of Somalia 1. Introduction Financial institutions have always been some of the most important sectors of the government. It is the cornerstone of socio-economic development of the society and the nation at large. In this regard, the performance of financial institutions is of interest of organisations of all types including governments and the role of corporate governance in ensuring satisfactory performance of financial institutions continues to attract empirical examination. Corporate governance is a concept that captures two key concepts, that is, corporate and governance. Corporate implies institutional or that which pertains to institutions or firms. On the other hand, governance refers to the manner in which power is executed in the management of economic and social resources with the object of realizing sustainable human development. Corporate governance is the global phenomenon related with the pattern towards more prominent corporate duty and the direct of business inside worthy moral guidelines. Straightforwardness, responsibility and receptiveness in announcing and exposure of information, both operational and budgetary, are globally acknowledged to be crucial to the act of corporate governance techniques. The object of good corporate governance is accomplished when Organisations exhibit their open responsibility and direct their business within moral models. The result of this will appear as powerful financial performance results, both internally and externally (Fourier, 2006). For government offices, this gets apparent in governance practice whose effect shows in progress in ISSN 2278 – 0211 (Online) Abdikadir Abdullahi Ali Ph.D. Candidate, Department of Financial/Mgt Strategy Consultancy, ALI-BOY Association, Kenya Thomas Anyanje Senaji Professor, Department of Academics and Students Affairs, The East African University, Kenya Dr. Douglus Ogolla Awino Senior Lecturer, Department of Business Administration, Kenya Methodist University, Kenya Abstract: Effective implementation of financial management practices by government institutions has important implications for delivery of service to citizens. However, some reports indicate the need for improvement of these practices in the Federal Government of Somalia though corporate governance can partly address this concern. The purpose of this study was to examine the relationship between corporate governance and implementation of financial management practices in financial Institutions of the Federal Government of Somalia. A descriptive quantitative survey of 112 respondents was conducted using self-report structured questionnaires. The results indicated that there was inadequate compliance with the four corporate governance principles, namely participation, accountability, transparency and equity, because the responses had a mean of three (M=3) on a scale of 1 to 5 where 1= strongly disagree and 5=strongly agree with statements of the practice of the principle. Further, there was insufficient implementation of financial management best-practices of planning, control, budgeting and resource allocation. It was also established that corporate governance practices had a significant influence on the implementation of financial management practices. Two of corporate governance principles, transparency and accountability, were found to be significant predictors of implementation of financial management practices. The influence of participation and equity principles of corporate governance were not significant at 5% level of significance (both p-values were greater than 0.05). These findings provide policy implications for the Federal Government of Somalia institutions for enhancing their corporate governance practices which would lead to improvement in the implementation of best- practice financial management practices Keywords: Corporate governance, financial management practices, financial institutions, federal government