Perception Of Employees On Corporate Governance And Performance Of Kenya Airways Limited

Abstract

Recent global events involving the collapse of major world corporations continue to reverberate the significance of good corporate governance as a catch phrase essential for guaranteeing the viability and financial health of business entities. It ensures that all shareholder interests are safeguarded and guarantees equitable treatment of all stakeholders. Corporate governance needs to be emphasized as a means of increasing profitability and revitalizing the aviation industry. The study sought to ascertain the perception of employees on corporate governance and performance of Kenya Airways Ltd. Specifically, this study examined how board leadership, company ownership structure, board composition and CEO duality affect Kenya Airways Ltd in achieving performance. The research study used descriptive research design. The sample for the study was 266 respondents based at the Kenya Airways Headquarters in Nairobi. The data was collected using structured questionnaires. Regression analysis was applied; which is a statistical tool used when investigating the relationship between variables. The collected data was analyzed and presented in the form of charts, tables and narratives using the Statistical Package for Social Sciences and Microsoft Excel Package. The study concluded that board leadership, company ownership structure, board composition have a positive significant impact on the performance of Kenya Airways Ltd. CEO duality showed a negative relationship. 66% variations were explained by the independent variable 34% by factors that were not included in the study. This showed that the all the independent variables did affect the dependent variable. The study recommends that the ownership structure be strengthened and more power be given to the owners in demanding performance from the company management. The study also recommends that the board composition be of individuals who have the best interests of the company at heart. The board needs to be comprised of individuals who are well educated and experienced so as they can be able to change the companies direction towards profitability. The study recommends that the management comes up with an elaborate strategy backed by its key shareholders such as KLM and the government in order to facilitate turnaround of the company’s fortunes. Finally the study recommends that the company evaluates its board leadership, the chairman and the CEO and ensure that they are good performers and good leaders who are able to oversee the troubled carrier’s recovery from a massive financial loss.