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Scholars have long traced the trajectory of law, finance and governance.Legal centrists in particular have advanced the "law matters theory"-that the nature of a legal system,its legal rules and quality of enforcement are fundamental in shapping corporate governance.However, there are jurisdictions where legal rules are inadequate and alternative institutions perform the functional role of law. Corporate governance in Uganda has historically evoloved in an environment of weak company regulation. However, banks as providers of exernal capital to those companies that use formal credit, are able to influence certain aspects of corporate behavior and therefore corproate governance.