Challenges of Implementing Lord Cadbury's Principles of Corporate Governance in Investment Banks in Kenya

Abstract

The Cadbury report of 1992 outlines the three fundamental principles of corporate governance as: Openness, Integrity and Accountability. These principles arc relevant to both public and private entities. This study set out to determine the challenges of implementing Lord Cadbury's Principles of Corporate Governance in Investment Banks in Kenya. The researcher applied a descriptive and inference research design. The target population of this study consisted of a total of 60 managers working at the twelve Investments Banks in Kenya. The study used Primary data which was obtained through self-administered questionnaires with closed and open-ended questions. A questionnaire was used to collect primary data for this study. The study established that corporate governance applied to the investment banking sector since the agency problems were likely to arise between the principles who were the shareholders and the managers who was agents. Directors' service contracts did not exceed three years without shareholders' approval and investment banks experienced the challenges of legal systems, Culture of the country, regulatory and supervisory systems , the influence of the stakeholders in the process of implementating the Lord Cardbury's principles, performance standards applied and compensation and remuneration of executives also influenced