The Effect of Corporate Governance Structures on Financial Performance of Commercial Banks in Kenya

Abstract

The research sought to analyze how corporate governance structures affect the financial performance of commercial banks in Kenya. The research focused on all the commercial banks listed in the Nairobi Securities Exchange. The general objective of this research was to determine how corporate governance structures affect the financial performance of commercial banks in Kenya. The research was to determine how corporate governance structures affect the financial performance of commercial banks in Kenya by answering the following research questions: Is there a positive relationship between bank performances of the preceding year and frequency of board meetings? Is there a positive relationship between the bank performances and the percentage of Institutional investors share ownership? Is there a positive relationship between executive compensation and bank performance? Is there a positive relationship between the ratio of outside directors to total directors and Banks’ performance? Typically corporate governance structures adopted by firms experiencing declining performance results in changes in; board meeting frequency; board composition insider share ownership and executive compensation.