Corporate Governance Practices Adopted by Kenya Commercial Bank Limited

Abstract

In the recent past, the banking industry has faced increased competition and tremendous challenges globalization, privatization of government owned banks, adverse changes in economic and political patterns and narrowing of profit margins. This has prompted the industry players to take competition to a higher level. Increased competition is critical advancing economy growth in banking industry. This study sought to identify and assess the corporate governance practices adopted by KCB in Kenya. The research design applied in the study was a case study. The primary data was collected using interview guide done on five interviewees who are senior managers and heads of departments at the KCB head office. The descriptive analysis was done using content analysis. The results indicated that KCB has had adopted corporate governance practices which led to their consistent profitability reports despite stringent measures that have been introduced in the banking industry in the past. The company‟s ability to adopt and implement the practices progressively was a success because there was employees inclusivity as well as proper communication of the practices, training on the same throughout the organization The other responses are on the prudent practices which are: qualification and competence of the board, defining roles and responsibilities, ethical dealing and integrity, compensation decisions as well as effective risk management. It emerged from the study that over half of the respondents were of the view that board characteristics had the greatest influence on corporate governance quality. The conclusion drawn was that the research was a success having shown that good corporate governance practices were indeed more influential to the general performance of the firm. Recommendations arising from the study were that it is important for organizations to embrace the importance of good governance hence the need to sensitive and create a culture of good corporate governance practices by incorporating the office of governance in the structure of the organization to spearhead. Also the organization should have clear policy on corporate governance and the organization should incorporate effective systems to protect and encourage whistle blowers.