Effect of Corporate Governance Practices on Performance of Conservation Non-governmental Organizations in Kenya

Abstract

The aim as well as purpose of this inquiry was to determine the connection the adoption of corporate governance practices and the outcome of productivity (performance) of conservation non-governmental organizations (NGOs) operating in Kenya. The specific dimensions of corporate governance practices investigated were external directorship, transparency and accountability, audit committee and board gender diversity. The research employed a cross-sectional descriptive research design with the population of the study being the 33 conservation NGOs registered by the NGOs Coordination Board in Nairobi Kenya. Data from the field was collected using questionnaires as the main data collection form and the analysis was done using descriptive model including mean as well as the standard deviation. The conclusions revealed that external directorship provides the board with strategic expertise in the running of the organization and also brings on board external persons with varied expertise, which has a positive effect in attracting funding from donors. The organizations enhanced transparency and accountability through publishing of the activities, a move that affords stakeholders an opportunity to assess the operation and financial information. Independent directors and increasing the size of the audit committee resulted in a more effective audit quality and at the same time preventing opportunistic actions by the managers. Similarly, board gender diversity was manifested through increasing the role of women in both the board supervisory and management function. The results also show that all the predictors positively affected performance of the conservation NGOs though was insignificant since their p-values were greater than 0.05 except the external directorship. The results show that representation of women in the management and structural system in an organization enhances the level of decision making and thus the NGOs should endeavour to have a balanced gender at the management and board level. The research recommends that board composition should take into account the external and internal connections that the board members have developed. Board reforms should take into consideration the required social capital.