| dc.description.abstract | Good corporate governance system helps people tasked with decision making,
accountability and responsibility within and outside a corporate body in making optimal
decisions. It ensures varying interests of all stakeholders are obtained to an acceptable
level. The purpose of this research was to analyze whether there is a relationship between
corporate governance and financial performance of the 62 companies listed at the NSE.
Data was obtained from 48 companies listed at the NSE for the period January 2009 to
December 2013 using a check list to obtain data relevant to the study. The data obtained
was analyzed on a multiple linear regression model using Statistical Package for Social
Sciences (SPSS). The analysis included descriptive statistics, correlation coefficients, beta
coefficients of the variables and the coefficient of determination. From the regression
analysis it was revealed that Board Size, Board Composition, CEO duality and size of the
firm to a constant zero , financial performance of listed companies would stand at 0.567 , a
unit increase in board size would lead to decrease in financial performance (ROA) of listed
companies by a factor of 0.017, unit increase in Board Composition would lead to increase
in financial performance of listed companies by a factor of 0.172 , a unit decrease in CEO
duality would lead to increase in financial performance of listed companies by a factor of
0.057 and unit increase in size would lead to increase in financial performance of listed
companies by a factor of 0.109. The data analyzed showed that there was a positive
relationship between corporate governance attributes and firm performance. The
relationship was found to be significant at the 95% level. It can therefore be concluded that
it would be beneficial for a firm to institute corporate governance practices and measures.
The study recommends that public listed companies should carefully select board
composition so as to strike a balance between executive and non-executive, female
directors, should consider the age and the profession of the chair and other members of the
board in relation to the nature of the company. The board needs to be comprised of welleducated
people since they are actively involved in shaping firms strategy. Ownership
concentration needs to be reduced to avoid control being in the hands of a few people as
this will enhance monitoring. Employees should be encouraged to be more active in
financial management aspects of the business. Finally, the study recommends that financial
monitoring should be done thoroughly by the board. Companies should consider adopting
regular Corporate Governance Audits and Evaluations. | en_US |
