The effect of board structure on the performance of quoted companies at the Nairobi Stock Exchange
This study examined the effect of the Board structure on the performance of listed firms at the Nairobi Stock Exchange. It is revealed that there is no significant effect of board structure in the form of representation of executive directors, non-executive directors, or number of females on firm performance, implying that these variables cannot add potential economic value to the quoted firms in Kenya. The study also revealed that the board size has no significant effect. The study focused on the structure of the board to test the performance of listed companies at the Nairobi stock Exchange. The measures of performance employed were Tobin Q and Return on stock which was consistent with most of the earlier studies done on board and ownership structures. Analysis of all the five sectors had mixed findings. The study determined that size of the board was only significant in the agricultural sector where the impact was negative as a predictor of Tobin Q. The number of non-executive directors had no effect in the trading sectors. However, in the industrial and allied sector the non-executive variable was excluded in the model suggesting it added no value. The number of executive directors was only significant under Tobin Q in the Industrial and Allied sector with a positive effect. These findings on the inter sector analysis are mixed suggesting that different sectors responded differently to the variables under consideration across the study period 2005-2010.It also suggests that other variables apart from the ones considered in the study had a significant effect on the performance of firms at the Nairobi Stock Exchange.