The Relationship Between Corporate Governance and Performance of Nongovernmental Organizations in Kenya

Abstract

In the Kenyan NGO sector, over 50 percent of the organizations are small and transitory in nature, often formed to maximize on an opportunity. The last two decades have seen an increase in non-profit organizations and yet the aspect of corporate governance has been largely neglected in studies that test the links between governance attributes and organizational performance. This study therefore examines the relationship between governance and performance in order to guide in decision-making. The results of this research will shape policy among government agencies mandated to register and regulate the performance of NGOs through their jurisdiction in developing appropriate mechanisms to enhance improved performance The study adopted descriptive case design targeting all NGOs in Kenya that are registered in accordance to the NGO Coordination Act, 1990. The researcher used a stratified sampling method in realising homogenous strata and then picking a sample from each stratum for the final sample size of 30 NGOs out of the sampling frame. The study used a questionnaire to collect primary data. The data was analyzed using both qualitative and quantitative techniques by use of Statistical Package for Social Sciences. The study found that governance and management have a major role to play as far as organizational performance is concerned. Relevance of programs implemented, appropriateness of the design of programs, achievement of intended results, cost and productivity, responsiveness as well as protection of assets had the highest score of 5 as favoured by 84% of the respondents among performance measurement tools examined. NGOs accountability remains a pressing public concern. In response, donors around the globe have adopted performance measurement to use with their grantees in order to ensure accountability and secure some social benefit for their grants.