| dc.description.abstract | Recent global events concerning high-profile corporate failures have put back on the policy agenda and intensified debate on the efficacy of corporate governance mechanisms as a means of increasing financial performance of parastatals. Since the 1990s to very recently, grand scandals in Kenya such as the Goldenberg and Anglo leasing among many others have put the quality of corporate governance into question. These scandals have, in one way or another, involved one or more parastatals and government institutions and have conspicuously featured in the public domain. The objective of this research was to determine the relationship between corporate governance and financial performance of parastatals in Kenya.
The study adopted a causal design. The population of interest in this study consisted of all the parastatals in Kenya. There are 158 Parastatals as obtained from the Inspectorate of State Corporations - Office of the President as at March 2009. The study proposed to investigate a total of 79 state corporations. The research used primary data collected through semi-structured questionnaires with open and closed ended questions.
The study concludes that there is a positive relationship between corporate governance and financial performance of parastatals in Kenya. The results are consistent with existing literature, but there is need to err on the side of caution in any attempt to generalize the findings as the sample selection was determined by the availability of data rather than by any probability criterion.
From the study, parastatals that employed effective appointment, selection, induction, training, development of board members, had operative board structures and efficient Chairpersons were linked to good financial performance. The study further concludes that efficiency and effectiveness in service delivery, prevailing corporate culture, the stipulation by the code of best practice, and the strategic direction that the corporation has are the main factors that lead to corporate governance practices in the state corporations | en_US |
