Relationship between selected corporate board dynamics and financial performance of commercial Banks in Kenya
Commercial banks in Kenya have gone through a number of challenges in their quest to achieve high levels of performance. Corporate Board Dynamics is one category of corporate governance that focuses on how the organization performs in that it gives a strategic direction in which an organization is to take. The objective of the study was to determine the relationship between selected corporate board dynamics and financial performance of commercial banks in Kenya. The board dynamics studied were: - Board size, composition of executive and non-executive members and the gender diversity in corporate boards. The study adopted a descriptive research design and the study population was 43 licensed Commercial Banks in Kenya as at December 2013. A census survey was conducted for the five years from 2009 to 2013.The study found that the overall regression model for firm performance based on return on assets is significant. This means that the independent variables studied are important predictors of commercial banks financial performance when firm size is incorporated as a control variable. It was also found that the average board size for the Kenyan commercial banks is 10 board members with and the average number of executive board members is 3 and an average of one women representation in the boards of commercial banks.The study concludes that the independent variables namely board size; board composition and gender diversity are significant predictors of the financial performance based on the research model. It is therefore important that the right mix of these variables be put in place in order to maximize financial performance of the commercial banks in Kenya.