Corporate Governance and Financial Sustainability of Nongovernmental Organisations in Kenya

Abstract

Financial sustainability is crucial for the stability of the NGOs in Kenya. The ability of NGOs to be financially resilient and stable is anchored by corporate governance. The NGOs depends on donation for financial sustainability. The NGOs have been vital in the provision of education, health, and other basic amenities. Financial sustainability ensures the going concern of the NGOs. The donors are motivated if some existing policies and structures ensure business continuity. The data was sourced through the secondary method. The historical data was readily available. It was readily available for decision-making. The conceptual, contextual, and methodological gap resulting from the previous studies. The research looks at the four variables that expounded financial sustainability. The research studied 50 NGOs. The data was analyzed using SPSS and putting in place descriptive and inferential statistics. The study finding postulated a positive and significant level of association between the board size, board composition, CEO duality, and board diversity. The findings showed positive and strong association as per the findings. Regression and ANOVA were done to demonstrate the coefficient of determination and significance level. The variables were explained by R of 62.4%, R square 39.0%, R adjusted 33.6%, and the standard deviation of 0.3656. The study indicated that the other variable that was not studied in this research was 61.0%. Board size, Board Composition, CEO Duality, and Board diversity represented 39%. The findings postulated that board size, board composition, CEO Duality, and board diversity had a strong and significant level of association with financial sustainability. The constant value was illustrated by 3.830, while board size, board composition, CEO Duality and board diversity adjusted accordingly by 0.787, 0.082, 0.325, 0.768 respectively. A one-unit increase in each of the variables such as board size led to incremental in financial sustainability by 0.787% while an increase in one unit of board composition led to an increase of financial sustainability by 0.082. On the other hand, an increase in the one unit of CEO Duality led to a positive and significant change in the financial performance by 0.325, and finally, an increase in one unit of board diversity led to an increase in the 0.768 units of financial sustainability.