Strengthening Corporate Governance to Curb Corruption in Banks in Kenya: a Case Study of Dubai Bank and Imperial Bank

Abstract

The Corruption menace is not only local but also global. It is a major threat to global financial stability and international economic security. Corruption is no respecter of the size or types of business organizations or even their locations. It can crush a firm and create a ripple effect on the firm’s stakeholders’ livelihoods which are, invariably, pegged on the firm’s financial successes and Kenya just like other countries is no exception Corruption is equally not a respecter of sectors and a sector that has recently felt its terrible hit is the Kenya banking sector. The author examines whether the emergence of corporate governance mechanisms in Kenya has had any tangible results in the eradication of corruption in the banking sector and in doing so, analyses the collapse of Dubai Bank and Imperial Bank and the reasons behind their respective collapse. The study comprises five chapters. The first introduces the background to the study, the underlying theoretical framework, the hypotheses, and the problem statement among others. The second chapter founds the case study which contains an in-depth analysis of the collapse of Dubai Bank and Imperial Bank as it seeks to establish that weak corporate governance and corruption are the common denominators in their collapse. The third chapter reviews the existing policy, legal and regulatory framework in Kenya on corporate governance and corruption both local and international. The fourth chapter examines the practice of corporate governance in South Africa and in the United to appreciate best practices. The study wraps up with conclusions from the research findings and proceeds to prescribe recommendations for addressing the challenges facing banks in Kenya.