99 Records out of 22207 Records

The relationship between corporate governance and financial performance of parastatals in Kenya

Author: Guzeh, Patrick Mulbah

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Corporate governance ; Parastatals ; Fianancial management ;

Abstract:

Recent and continuous global events involving major corporate and business failures continue to reverberate the importance of good corporate governance as a catch phrase necessary for ensuring the financial health and viability of business entities so that the interests of all stakeholders are protected and to prevent the unfair dominance of the interests of any stakeholder over those of the others. Studies on Corporate governance have mainly focused on private firms. Inefficiency, fmancial impropriety and mismanagement have characterized most public sector financial management. Therefore, corporate governance needs to be emphasized as a means of revitalizing government's investment and increasing profitability of parastatals. This study sought to establish the relationship between corporate governance and financial performance of parastatals in Kenya. The financial performance parameter used for the study was return on asset while four attributes of corporate governance practice were used, namely, board size, board structure, multiple directorship and audit committee. The study used descriptive research design. The population was 127 parastatals and a sample of 30 was chosen for the study. Data were obtained from 27 of the 30 selected parastatals and analyzed using descriptive statistics and multiple regression analysis between April 2012 and July 31, 2012, In general, the study found that there exists a positive relationship between corporate governance and return on asset. This implies that good corporate governance practices enhance financial performance of parastatals. Therefore, policy makers and management of parastatals must ensure that tenets of good corporate governance should be applied to the latter to enhance performance.

The relationship between director remuneration and performance of firms listed in the Nairobi Securities Exchange

Author: Awuor, Mercy Mildred

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Nairobi Securities Exchange ; Corporate governance ; Salaries USE Wages and salaries ; Wages and salaries ; Securities markets ;

Abstract:

The agency problem has been a source of great interest in corporate governance to both industry and academic researchers. Various proposals have been advanced to resolve the agency problem, with most of the suggestions having been incorporated into corporate governance principles and best practices that companies are encouraged to apply. However, despite advances in development of corporate governance best practices, the agency problem still persists. In Kenya, companies that are listed on the Nairobi Securities Exchange are required to comply with the corporate governance principles that are issued by the capital markets authority, which require management remuneration to be based on performance. The purpose of the study is to establish the relationship between management remuneration and firm performance for companies that are listed on the Nairobi Securities Exchange. The study adopted a descriptive research design. The jOPulation of the study was the companies listed at the Nairobi Securities Exchange. Data was obtained from published audited financial statements covering the period between 2006 and 2010. Regression analysis demonstrated a positive link between management remuneration, ROE, EAT and Tobin's Q as measures of firm performance. The study concludes that among Kenyan companies, management remuneration has a weak relationship with ROE and Tobin's Q, but a moderately stron~ positive relationship with EAT. The implication of this finding is that, among Kenyan listed companies, directors remuneration is strongly linked to raw performance indicators as opposed to measures of efficiency of utilization of shareholder funds and market performance. These findings therefore point towards high possibility of agency problem since directors can benefit themselves by maximizing raw earnings without due regard to long term performance and market performance.

The relationship between corporate governance and firm performance in the case of the Nairobi Stock Market

Author: Chirchir, Wilson Kipng'eno

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Nairobi Securities Exchange ; Corporate governance ; Return on Assets ;

Abstract:

The study analyzed the performance of firms listed on the Nairobi Securities Exchange (NSE) and active for the years 2006 to 2010. A total of 232 observations were taken for firms whose data was available. Performance was measured using the accounting Return on Assets and the market-based Tobin's Q ratio. Data was analyzed using dynamic panel data with Ordinary Least Squares estimation applied to investigate the significance of the overall models for relationship between performance and the corporate governance. ANOVA results generated from the OLS estimation were used to test the overall significance of the model while correlation analysis was done for the relationship between performance and the individual corporate governance variables. The study found that firms sampled had a high level of board independence (72.25%). Firms had a mean size of 6.62 for independent directors and 2.41 for non-independent directors. The mean size for directors was 8.29 with standard deviation of 3.41 representing a wide variation in size of boards. The study also found a wide variation in corporate performance as measured by both the ROA and the Tobin's Q. The study found a positive, though low correlation between firm performance and board independence. The overall quality of the boards was also found to be low (30.71%). However, the study found a positive and statistically significant relationship between the quality of the board and board independence. This implies that the effectiveness of corporate governance appears to increase with an increase in board independence. Overall, however, the study did not find any significant relationship between performance and corporate governance variables. It was suspected that the lack of the expected significant relationship may have been caused by the confounding impact of the unexpected turmoil that affected the macroeconomic and political environment in the country and which negatively affected Kenyan industry during the period under study. This arose from the significant impact of violence in the period 2007-2008 arising from political violence and which had wide (and negative) ramifications on corporate performance for subsequent years up to 2010.

Corporate governance practices and performance at Elimu Sacco in Kenya

Author: Wasike, Joan Torodia

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Corporate governance/Financial performance/Elimu Sacco/Savings and credit cooperative societies ;

Abstract:

Previous research has shown that corporate governance in Sacco's in Kenya has not been effectively regulated and supervised. It is important to emphasize that good corporate governance practices in the SACCOs is imperative if the cooperative movement is to effectively play a key role in the overall development in Kenya. This study sought to achieve two objectives: To find out the influence of corporate governance practices on the performance of Elimu SACCO and to establish the challenges facing corporate governance practises at Elimu SACCO. The study used both primary and secondary data. Primary data was collected using an interview guide that had open-ended questions which enabled the researcher to collect qualitative data. The respondents of the study were ten (10) managers drawn from the various departments at Elimu SACCO. The study fmdings indicated that the main tasks of corporate governance involved assuring corporate efficiency and mitigating arising conflicts, providing for transparency and legitimacy of corporate activity, lowering risk for investments and providing high returns for investors and delivering framework for managerial accountability. Further, findings showed that corporate governance at Elimu SACCO encompassed authority, accountability, stewardship, leadership, direction and control exercised within an organization. The study concluded that the corporate governance helped in defining the relation between the SACCO and its general environment, the social and political systems in which it operates and also linked the way management and control were organized thus affecting the performance of the SACCO and its long run competitiveness. The study recommends that Elimu SACCO should maintain a smaller board size that facilitates performance of the SACCO. However, the management should ensure that the board size is optimal as a very small board can also be redundant and may not be efficient in governing the SACCO. The study further recommends that Elimu SACCO be well equipped to implement corporate governance practices in its daily activities to the levels which might be acceptable in developed market economies and improve accessibility to firm financing by enhancing transparency and accountability in the information disclosed.

Composition of boards of directors in not for profit organizations and its effects on Performance of Governance functions : a case of organizations in Nairobi

Author: Kamau, Francis K.

Awarding University: United States International University-Africa, Kenya

Level : MBA

Year: 2012

Holding Libraries: ;

Subject Terms: Boards of directors/Nonprofit organizations/Corporate governance/Nairobi, Kenya ;

Abstract:

ABSTRACT NOT AVAILABLE

Separation of powers in corporate governance of companies listed in the Nairobi Securities Exchange

Author: Kubai, Joy Kendi

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Separation of powers/Corporate governance/Public companies/Nairobi Securities Exchange ;

Abstract:

Corporations are associated with a number of governance problems chief among which are on how to separate powers among the several stakeholders and still maintain a unified front in pursuing their core business. The purpose of this study was to analyze separation of powers in companies listed in the Nairobi Securities Exchange. The research objectives included establishing the extent of separation of powers within those listed companies and determining factors that influence the existence of separation of powers in the Companies listed in the Nairobi Securities Exchange. A survey was carried on all the companies listed in the Nairobi Securities Exchange where a questionnaire was used in collection of primary data and results were analyzed in form of frequencies and percentages in tables.From the research objectives, this study found out that companies listed in the Nairobi Securities Exchange have attempted to abide by the laid guidelines by the Capital Markets Authorities in as far as separation of powers is concerned but the results are still not clear as there seems to be a conflict of interest between shareholders and Directors with a majority of Directors being the main shareholders hence limiting involvement of the minority shareholders. This study recommends enforcement of clear separation of powers especially between the majority shareholders and directors through proper internal corporate governance on conflicts of interest which should be strictly adhered to.

Assessment of corporate governance and return on assets of commercial banks in Kenya

Author: Kigera, Monicah N

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Corporate governance/Return on assets/Commercial banks/Banking industry/Profitability ;

Abstract:

The study as emphasized in the problem statement was to assess the implementation of the corporate governance .mechanisms as per the requirements of the prudential guidelines issued by the Central Bank of Kenya in 2006. Following the financial crisis witnessed in the 1990's that witnessed the collapse of various banks in Kenya, as well as privatization of banks and reduction of government control of banks calling for amendments in the banking supervision regulations. The study relied on the provisions of the prudential guidelines on corporate governance as well as the requirements of the CMA for the listed banks and the Sharia banking requirements for the Islamic banks. The data collection was done on the basis of five mechanisms of governance being shareholder's rights, management and supervisory board, commitment to corporate governance, transparency and auditing for the independent variables, and return on assets for the dependent variable and was done from the annual reports and the web sites of the various banks as well as data as provided by the various banks on request. The outcome of the study as concluded in the findings reveals that banks have greatly improved on the implementation as majority have almost fully complied with a few areas still lacking like the shareholding disclosure of the privately owned banks and board of director's composition on the local committees which in some do not meet the 3/Sth required. Significant areas as per the analysis were the bank ownership whether foreign owned or local, the financial analysis capability of the board and the commitment in terms of ethics. In majority of the banks, the return on assets time series analysis indicated an increase over the five year period reviewed compared to before 2006 when there were no corporate governance guidelines. In conclusion, it is not conclusive to say that governance mechanisms are directly related to the improvement in the performance of banks as some have declining ROA over the period despite compliance to the requirements.

Integration of corporate governance in strategic management at the Ethics and Anti-Corruption Commission

Author: Kemboi, Abraham Kipkoech

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Corporate governance/Strategic management/Ethics and Anti-Corruption Commission ;

Abstract:

Corporate governance issues are of great concern in the world today because of its influences on the effectiveness and relevance of an organization's strategy. Organizations are more than ever, under increased pressure to be proactive in reforming various aspects of corporate governance to protect stakeholders' interests. A weak corporate governance results in weak organizational strategy, which seriously compromises the strategic positioning and success of an organization. The objective of this study was to determine the integration of corporate governance practices in strategic management at the Ethics and Anti-Corruption Commission. The research design adopted by the study was a case study. The study used primary as well as secondary data. The primary data were collected using an interview guide where as the secondary data were obtained from the Commission's manuals. The data was analyzed qualitatively using content analysis. The study found out that the commission practised corporate governance as evidenced by presence of a robust corporate governance instruments such as code of conduct, audit committee and a functional board/commissioners. Corporate governance has been incorporated in commission's strategic management as indicated in the commission's current strategic plan. From the findings, it was concluded that the major challenge faced in implementing corporate governance at Ethics and Anti-Corruption Commission was mainly due to external political constraints and lack of internal stakeholder participation during strategy formulation. Arising from the findings, it was recommended that the Government of Kenya addresses political constraints affecting the Commission, and the Commission in tum encourages stakeholder participation in strategy formulation.

Impact of corporate governance practice on financial performance of the banking industry in Kenya

Author: Kalungu, Violet Syokau

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Corporate governance/Financial performance/Bank management/Banking industry ;

Abstract:

Due to the increased interest in corporate governance adherence by stakeholders and regulatory bodies of corporations in Kenya, the area has been of keen interest to scholars also. This study aimed at establishing the influence of various corporate governance aspects especially the role of the board on the financial performance of the banking industry in Kenya. The objectives of this study were to determine whether corporate governance practice had any effect on the financial performance of Kenyan commercial banks. The study focused on the role and attributes of the board of directors. The study was based on a five year period between the years 2006 to 2010 and was a census of all the banks in Kenya. Secondary data was collected from the Central Bank of Kenya and annual reports of the banks. Descriptive statistics, Pearson correlation and linear multiple regression were used as the underlying tests for empirical analysis, and to test existing relationships between independent and dependent variables. The findings from the data analysis show that there is a positive relationship between corporate governance and financial performance in the banking industry in Kenya. Based on the findings, it is concluded that the composition of the board of directors is positively correlated to the financial performance of the Kenyan commercial banks. It is also concluded that board size is correlated to the financial performance of the banks. The results from the regression analysis show that both board size and board composition are predictors of financial performance. Correlation between ROA and board composition is positive while board size and ROA also has a positive relationship showing that they are predictors of financial performance. There was separation of the role of CEO and chairman of the board in all the banks except one thus CEO duality and board monitoring are constant in the entire study period and thus have no influence on the financial performance of the banking industry.

Effect of having institutional investors on corporate governance of companies listed on the Nairobi Securities Exchange

Author: Kibaki, Virginiah Wangui

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Investors/Institutional investments/Corporate governance/Public companies/Nairobi Securities Exchange ;

Abstract:

The research study sought to establish the effects of institutional ownership of companies on the NSE on corporate governance. The study focused on how institutional ownership may have an influence on the corporate governance of the companies. Institutional ownership of companies is expected to influence corporate governance of the companies by enhanced monitoring and board influence. The significant influence expected from institutional ownership of companies can only be exhibited by how well they are able to deal with all stakeholders. Companies listed on the NSE have mixed ownership with institutionally owned and individual ownership. The level of institutional ownership was measured on a scale of 1 to 5 based on percentage categories of 1-20% to 81-100%. Corporate governance was measured using scores of 1-5 based on the average of 14 corporate governance components for each firm. The research established that institutional ownership has a positive influence on the corporate governance of companies on the NSE. Institutional ownership was observed to have a positive influence on the corporate governance of firms quoted on 'the NSE. Companies with substantial institutional ownership were identified to have better corporate governance attributed to improvement monitoring and lower information costs. However at 95% level of confidence, the relationship was found. to be not significant between institutional ownership and corporate governance.