Separation of powers in corporate governance of companies listed in the 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.