Evaluation of corporate governance guidelines implementation by state corporations in Kenya

Abstract

The study objective was to evaluate the corporate governance guidelines implementation by State Corporations in Kenya. The study targeted a sample of 93 corporations, with 68 filling-in and returning the questionnaires. The research utilized primary data. A structured questionnaire with closed -ended questions was used to gather the primary data. To magnify the differences, a nine-point likert scale was deployed to gather the data. The interviewees were corporation secretaries, internal auditors, risk managers, or monitoring and evaluation officers with at least one response anticipated from each state corporation. The study collected the data through e-mail or web link. However, for those not responding early enough, there was a physical follow-up to collect the data. Only a single response was received from each state corporation that filled-in and returned the questionnaire. The variables for analysis included the board of directors; transparency and disclosure; stakeholder rights, obligations and relationship; accountability, risk management and internal controls; ethical leadership and corporate citizenship; sustainability and performance management; and compliance with laws and regulations. Data was examined and summarized by descriptive statistics, comprising; frequencies; percentages or proportions; ratios; standard deviations; and means. The implementation of corporate governance guidelines was ranked in order of extent of application from the highest tally to the lowest. Analysis of Variance (ANOVA) was deployed to determine whether implementation of corporate governance guidelines differ across the different categories of State Corporations. From the study findings, the governance practice with the most agreed upon statements was compliance with laws and regulations with an overall average of (86%, M=7.72, SD=1.814) while the least agreed upon statement was the stakeholder rights and obligations with an average of (80%, M=7.23, SD=2.04). This implies that the state corporations are compliant with the laws and regulations and also recognize transparency and disclosure as important aspects of corporate leadership because they enhance the confidence levels of investors, stakeholders and the wider society. The results also revealed that the state corporations are facing challenges when it comes to stakeholder rights, obligations and relationships. Accountability, risk management and internal control is also highlighted as an area that needs improvement. Therefore, the implication is that full implementation of the corporate governance guidelines has not been realized by most state corporations. Given the different configuration and functions of state corporations, it was found to be statistically significant that state corporations are at different levels of xi implementation of corporate governance guidelines. Corporations directly dealing with public funds – public fund management, revenue collection and the regulatory ones scored the highest in compliance while those in social services, education and training scored the least.