An analysis of the effect of corporate governance on performance of commercial state corporations in Kenya

Alice Njeri Miring'u

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Corporate Finance and Governance Gender Diversity and Inequality Corporate Governance and Financial Management

Abstract

This study sought to examine how Corporate Governance affects performance in commercial state corporations in Kenya. Well-governed firms have higher firm performance. Mismanagement, bu reaucracy, wastage, incompetence and irresponsibility by directors and employees are the main problems that have made State corporations (SCs) fail to achieve their performance. The poor performance of SCs in Kenya by 1990 led to outflow from central government to parastatals equivalent to 1 percent of the GDP in 1991. The objective of the study is to identify the relationship between financial performance, board composition and size. The study used descriptive survey design. The target population for this study was 41 commercial SCs in Kenya as presented by Inspectorate of SCs. Sample of 30 respondents out of 41 was found ideal. Respondents were 30 human resource officers. Data were analyzed through descriptive statistics and multilinear regression technique. The findings were that the board size mean for the sample was found to be ten while a minimum of three outside directors is required on the board. The study thus discloses that there is a positive relationship between RoE and board size and board compositions of all SCs.

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References

1976Theory of the firm: Managerial behavior, agency costs and ownership structure 1993The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems 1996Higher market valuation of companies with a small board of directors 1999The Changing Corporate Governance Paradigm: Implications for Transition and Developing Countries

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2013Effects of Corporate Governance on Financial Performance of Listed Insurance Firms in Kenya 2013The Relationship Between Corporate Governance And Working Capital Management Efficiency Of Firms Listed At The Nairobi Securities Exchange 2015Demographic Diversity in Top Management Team and Financial Reporting Quality in Commercial State Corporations in Kenya 2019Influence of idealized influence on employee engagement in parastatals in the energy sector in Kenya 2017INFLUENCE OF CORPORATE ENTREPRENEURSHIP ON PERFORMANCE OF STATE CORPORATIONS IN KENYA 2020INFLUENCE OF EMPLOYEE ENGAGEMENT ON ORGANIZATIONAL PERFORMANCE IN STATE CORPORATIONS IN KENYA

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