Corporate Governance and Performance of Commercial Banks Listed at the Nairobi Securities Exchange, Kenya

This study examined the relationships among corporate governance, financial characteristics, macroeconomic variables and financial performance of banking firms listed at the Nairobi Securities Exchange. The specific objectives were to establish the effect of corporate governance on performance of listed commercial banks; to determine the intervening effect of financial characteristics on the relationship between corporate governance and financial performance of banking firms; to establish the moderating effect macroeconomic variables on the relationship between corporate governance and financial performance of listed commercial banks; and to determine the joint effect of corporate governance, financial characteristics and macroeconomic variables on financial  performance of listed commercial banks. This study was anchored on, agency, stewardship, resource and wealth maximization theories and positivism philosophy. The study used census approach and targeted population of 11 listed banking firms between 2006 and 2020 was incorporated. The study used panel data extracted from annual reports of the individuals firms, while macroeconomic variables data were extracted from Central Bank of Kenya and Kenya National Bureau of Statistics economic reports. This study used longitudinal descriptive research design to determine relationships amongst independent, intervening, moderating and dependent variables. The study findings indicated that corporate governance, financial characteristics and macroeconomic variables were good predictors of listed commercial banks financial performance. Financial Leverage, Interest Rates and Inflation Rates had a significant effect on Return on Assets while Corporate Governance, Investments, Liquidity and Gross Domestic Product Growth Rate were found to have insignificant effect on Return on Assets. The findings also revealed that Financial Leverage, Inflation Rates and Gross Domestic Product Growth rate had a significant effect on Tobin’s Q of listed commercial banks in Kenya. The relationship between Corporate Governance, Investments, Liquidity and Interest Rates and Tobin’s Q was found to be insignificant. The study concluded that corporate governance, financial characteristics and macroeconomic variables affect financial performance commercial banks. Listed commercial banks therefore should adhere to corporate governance guidelines both from the Central Bank of Kenya and Capital Markets Authority of Kenya for continuous sound financial performance

Board Activities and Performance of Firms Listed at the Nairobi Securities Exchange

This study sought to examine the relationships among board activities and performance of firms listed at the Nairobi Securities Exchange. This study used a census approach and a target population of the study comprised of all companies listed at the Nairobi Securities Exchange between 2002 and 2016. A total of sixty five (65) companies were listed at the Nairobi Securities Exchange as at 31st December 2016. The data on board activities and performance of firms were extracted from annual reports of the individuals firms. This study employed longitudinal descriptive research design to determine relationships amongst board activities and performance of firms. A panel data regression analysis was conducted using random effects model which allowed the companies to have a common mean value of the intercept to determine whether corporate governance influence firm performance. An increasing trend was observed in other board activities variables such board ownership, board meetings, board tools, board committees and number of committees meetings. The study findings on the other hand revealed reducing trend in board tenure and board remuneration of listed firms Kenya. This was inferred to indicate that listed firms in Kenya have been strengthening their corporate governance over the study period. Regression analysis indicated that board activities are insignificant predators of Return on Assets, However board tenure, committees meetings and board remuneration were found to have a positive but insignificant effect on Tobin’s Q among listed firms in Kenya. Board ownership board tools, board meetings and number board committees were found to have negatively affected the performance measured by Tobin’s Q in listed firms in Kenya. However, only board tools significantly affected the performance measured by Tobin’s Q. The study concluded that listed firms in Kenya adopted corporate governance practices as part of the requirements of the regulating authority which had not impact on the specific company’s performance. Based on the findings of this study, stakeholders of listed firms and regulating authority such as Capital Markets Authority may relook at the board activities policies of listed firms with the view revising the existing policies or formulating new and more progressive policies to ensure shareholder interests are protected. These policies may go a long way to ensure listed firms not only strengthened their board activities during poor performing seasons but rather clear systems and activities that provide a clear roadmap to guide board operations

The Relationship between Board Structure and Performance of Firms Listed at the Nairobi Securities Exchange

This study examines the relationship between board structure and performance of firms listed at the Nairobi Securities Exchange. The study is anchored on agency theory, resource dependency theory, transaction cost theory, political theory and a census approach. A population of the study comprising sixty five companies listed at the Nairobi Securities Exchange between 2002 and 2016 were used. Data was extracted from annual reports of listed firms. This study employed longitudinal descriptive research design to determine the relationship. Panel data regression analysis was conducted using the random effects model. The results revealed that gender diversity and occupational expertise had significant effect on Return on Assets, while board independence and board age had significant effect on Tobin’s Q of listed firms in Kenya. On the other hand, board size had an insignificant effect on both Return on Assets and Tobin’s Q. The overall effect of board structure on Returns on Assets and Tobin’s Q was significant. The study concluded that various board structure mechanisms except board size have significant effect on performance of listed firms in Kenya, and the overall board structure had significant effect on performance of listed firms. The study recommended that management should incorporate board structure mechanisms to enhance performance of firms and regulatory authorities should review the current board structure variables to make them more relevant to improve performance of listed firms in Kenya

The Relationship between Corporate Governance, Financial Characteristics, Macroeconomic Factors and Performance of Firms Listed at the Nairobi Securities Exchange

This study sought to examine the relationships among corporate governance, financial characteristics, macroeconomic factors and performance of firms listed at the Nairobi Securities Exchange. This study used wealth maximisation theory, agency theory, stewardship theory and stakeholders’ theory to explain the relationships among dependent, intervening, moderating and independent variables. This study employed a census approach and a target population of the study comprised of all companies listed at the Nairobi Securities Exchange from 2002 to 2016. A total of sixty five were used. The data on corporate governance, financial characteristics and performance of firms were extracted from annual reports of the individuals firms and additional data on macroeconomic factors in relation to gross domestic product, interest rates and inflation rates were extracted from Central Bank of Kenya and Kenya National Bureau of Statistics economic reports. This study employed longitudinal descriptive research design to determine relationships amongst variables. A panel data regression analysis was conducted using random effects model which allowed the firms to have a common mean value of the intercept to determine whether corporate governance influence firm performance. The study established that most of the corporate governance practices adopted by listed firms in Kenya had significant effect of the performance of firms. The intervening effect of financial characteristics was determined, while macroeconomic factors were found to have moderating effect in the relationship between corporate governance and performance of listed firms. The study finally established that corporate governance, financial characteristics and macroeconomic factors had a significant joint effect on performance of firms listed on Nairobi Securities Exchange. Based on the findings the study made various conclusions. The study concluded that listed firms in Kenya adopted corporate governance practices as part of the requirements of the regulating authority which had impact on Returns of Assets and Tobin’s Q. The study further concluded that some listed firms in Kenya strengthened their corporate governance due to poor performance; some of the corporate governance practices used by listed firms had negative impact on performance of firms. This study contributed to the existing knowledge since it established that the relationship between corporate governance and firm performance heavily relied on the context under study and for this reason, studies conducted in different context have conflicting results

Corporate Governance, Financial Characteristics, Macroeconomic Factors and Performance of Manufacturing Firms Listed at the Nairobi Securities Exchange

Performance of manufacturing firms listed at the Nairobi securities exchange has been varied since the introduction of the corporate governance policies and practices in the year 2002. This has been blamed to a number of factors including financial characteristics and macroeconomic factors. The specific objectives were to establish the effect of corporate governance on performance of manufacturing firms listed at the Nairobi securities exchange; to determine the intervening effect of financial characteristics on corporate governance and performance of manufacturing firms; to establish the moderating effect of corporate governance and performance of manufacturing firm; and to determine joint effect of corporate governance, financial characteristics, macroeconomic factors and performance of listed manufacturing firms at the Nairobi securities exchange. This study was anchored on, agency theory, stewardship theory, stakeholders’ theory and resource dependence theory. The study used census approach and a target population of 10 manufacturing firms listed at the Nairobi securities exchange between 2002 and 2016 were incorporated. This study employed longitudinal descriptive research design to determine relationships amongst independent, intervening, moderating and dependent variables. A panel data regression analysis was conducted using random effects model. The study findings revealed that corporate governance had insignificant effect on performance of listed manufacturing firms in Kenya; investments, leverage and liquidity  significantly intervene in the relationship between corporate governance and performance of listed manufacturing firms; interest rate, inflation rate and  growth domestic product rate, significantly affect returns on assets and Tobin’s Q of listed manufacturing firms in Kenya; and corporate governance, financial characteristics and  macroeconomic factors were good predictors of listed manufacturing sector firms’ performance. Keywords: Firm performance, corporate governance, financial characteristics, macroeconomic factors, manufacturing firms, Nairobi securities exchange DOI: 10.7176/RJFA/10-22-08 Publication date: November 30th 201

Corporate Governance, Financial Management Practices, Macroeconomic Variables and Performance of Agricultural Firms Listed at the Nairobi Securities Exchange, Kenya

Performance of listed agricultural firms at the Nairobi Securities Exchange contrasted since introduction of corporate governance framework in Kenya in the year 2002. This study examined the relationships among corporate governance, financial management practices, macroeconomic variables and performance of listed agricultural firms.The specific objectives were to determine the effect of corporate governance on performance of listed agricultural firms; to establish the intervening effect of financial management practices on the association between corporate governance and performance of listed agricultural firms; to find effect of moderation of macroeconomic variables on the relationship between corporate governance and performance of listed agricultural firms and to establish effect of joint relationship among corporate governance, financial management practices and macroeconomic variables on performance of listed agricultural firms. The study used agency theory, stakeholder theory, resource dependency theory and cash conversion theory.  The study used a census approach and a target population of seven listed agricultural firms for a period of 2002-2016. Longitudinal descriptive research design was employed and data was collected from published annual firms’ reports and economic reports. Descriptive, inferential and panel regression analyses were performed.  The study established that the relationship between corporate governance and Tobin’s Q is significant while the relationship between corporate and Returns on Assets to be insignificant. Occupational expertise, board age, and board tools had significant relationship with Returns on Assets, while board tenure and board meetings had significant relationship with Tobin’s Q. The intervening effect of financial management practices on the relationship between corporate governance and performance of listed agricultural firms was insignificant. The moderating of macroeconomic variables on the relationship between corporate governance and performance of listed agricultural firms was significant. The joint effect of corporate governance, financial management practices, and macroeconomic variables on performance of listed agricultural firms was significant. The study recommended that directors of listed agricultural firms to enhance corporate governance and financial management practices to achieve higher performance of listed agricultural firms. Keywords:Corporate Governance, Financial Management Practices, Macroeconomic Variables, Firm Performance, Listed Agricultural Firms in Kenya. DOI: 10.7176/RJFA/13-2-02 Publication date: January 31st 202

Corporate Governance, Financial Characteristics, Macroeconomic Factors and Financial Performance of Agricultural Firms Listed at the Nairobi Securities Exchange, Kenya

This study sought to examine the relationships between corporate governance, financial characteristics, macroeconomic factors and financial performance of agricultural firms listed at the Nairobi Securities Exchange, Kenya. The specific objectives were to establish the effect of corporate governance on financial performance; to determine the intervening effect of financial characteristics on corporate governance and financial performance; to establish the moderating effect of macroeconomic factors on corporate governance and financial performance of listed agricultural firms; and to establish the joint effect of corporate governance, financial characteristics, macroeconomic factors and financial performance of listed agricultural firms in Kenya. This study is anchored on agency theory, transaction cost theory; political theory and cash conversion cycle theory. The study used census approach and a target population of seven agricultural firms listed at the Nairobi Securities Exchange between 2002 and 2016 was incorporated. The study used panel data. Corporate governance, financial characteristics and financial performance data was extracted from annual reports of the individuals firms while macroeconomic factors data was extracted from Central Bank of Kenya and Kenya National Bureau of Statistics economic reports. The study employed longitudinal descriptive research design. Descriptive and panel data regression analysis were conducted. Corporate governance had significant effect on financial performance of listed agricultural firms in Kenya; the intervening effect of financial characteristics on the relationship between corporate governance and financial performance was not determined; the moderating effect of macroeconomic factors on the relationship between corporate governance and financial performance was confirmed; and the joint relationship between corporate governance, financial characteristics and macroeconomic factors on financial performance was established. The study recommended a review of corporate governance principles and directors to comply with corporate governance structure and practices to enhance financial performance of firms