Effects of corporate governance practices on financial performance of public secondary schools in Siaya , county Kenya.

Abstract

Basic Education Act 2013 regulates the establishment of Board of Management in Public Secondary Schools. Every BOM considered frequency of holding meetings, gender diversity and audit committee makes it effective. The objective of the study was to determine the effect of corporate governance practices on financial performance of Public Secondary Schools in Siaya county, Kenya. Data was collected from the 148 Public Secondary Schools which were operational in Kenya for ratio three years: 2015, 2016 and 2017. Liquidity was used in this study to measure financial performance. Date was collected in relation to various elements of corporate governance practices specifically gender diversity, board meetings and audit committee. Data was analyzed using descriptive statistics. Correlation analysis shows positive significant on school board meetings and audit committee with current ratio. On the contrary gender diversity with current ratio indicated insignificant weak positive correlation. Overally, the two variables included in the final regression model were board meetings and audit committee. This study recommends that: the process of nomination of BOMs should commends three months earlier before expiry period; audit committee composition should consist of members with basic technical knowledge; BOMs meetings should be held quarterly within a calendar year of public institutions.