Governance and performance of church-based organizations in Kenya a case study of Presbyterian church of East Africa Kikuyu hospital

Abstract

In Kenya, various financial misappropriations including Church Based Organizations (CBOs) have occurred. These include among others, allegations of financial unfitness and failure to put benefactor assets to the expected use inciting withdrawal of financing, misbehavior and powerlessness to keep the law and policies hence leading to closure. This study accordingly looked at the question of the impact of governance on CBOs performance in Kenya. The particular goals of the study were to analyze the impact of board creation on performance of PCEA Kikuyu Hospital, study the impact of administration structure on performance of PCEA Kikuyu Hospital, and inspect the impact of board responsibility on its performance. The findings of the study would guide CBO on how to enhance effective governance in order to improve performance. The findings were expected to assist board members and policy makers in formulation of policies. This study was anchored on stewardship theory, stakeholder’s theory and agency theory of the organization. A descriptive research design was assumed on a contextual analysis of PCEA Kikuyu Hospital. The study population was 67 PCEA Kikuyu Hospital employees. The essential information was gathered through a structured questionnaire. It was analyzed by utilizing SPSS software where expressive and inferential outcomes were done. The regression showed that board composition had a significant effect on performance of PCEA Kikuyu Hospital (β= 0.470; Sig < 0.05); leadership structure had a positive and substantial effect on performance of PCEA Kikuyu Hospital (β= 0.164; Sig < 0.05) and board accountability had a positive and substantial effect on performance of PCEA Kikuyu Hospital (β= 0.221; Sig < 0.05). The study findings also indicated that jointly, corporate governance explained up to 54.1 percent of the variation in performance of PCEA Kikuyu Hospital. Based on the findings that corporate governance practices are important in enhancing performance of CBOs in Kenya, the study recommends the management of the CBOs to ensure adoption of more of the corporate governance practices such as board accountability, leadership structure and board composition. The management should ensure that they have a balanced board composition in terms of size, diversity and independence. They should also ensure that they have a flexible leadership structure with a good locus of control, effective decision making structure and a good corporate and ethical behaviour of management. Another recommendation is that the management should enhance guidelines that would ensure that there is board accountability in financial disclosure, internal control and transparency practices.