| dc.description.abstract | The purpose of this study is to investigate the relationship between board diversity and the
financial performance of insurance underwriters in Kenya. The importance of age, gender and
ethnicity as components of board diversity are raising the issues of their effect on the
performance of the firm. Board diversity on the other hand, is a component of corporate
governance, an area which has become critical on the success of firms in relation to their
financial performance. The insurance industry is an important component of the financial sector
of the economy because of its financial intermediation role. They give protection to
policyholders by guaranteeing the safety of their investments against accident and thereby
promoting business activities in the country. As a result of the peculiar characteristics of the
insurance industry and the significant contributions that is making to the development of the
economy coupled with the non existence of such study, there is a strong ground to conduct this
research.
The secondary data was collected from the Nairobi Securities Exchange for listed insurance
underwrites and from the individual companies for none listed underwriters. Pearson correlation
was used to measure the degree of association between variables under consideration, the panel
data regression was used to estimate the relationship between board diversity and financial
performance. Furthermore, in examining if board diversity variables are significantly different
from that of financial performance, the Chi-Square was used.
The findings show that a diversified board is positively associated with the financial performance
of insurance underwriters in Kenya. The insurance underwriters are therefore encouraged to
consider constituting diversified boards as part of good corporate governance practices to
improve their financial performance. Most importantly the regulatory authorities must ensure
that insurance underwriters’ boards are well constituted in terms of gender, age and ethnicity to
help the growth and development of the insurance industry. | en |
