The Effect Of Corporate Governance On Financial Performance Of Investment Managers In Kenya
Corporate governance is the system by which companies are directed and controlled, and it continues to gain prominence mostly triggered by the globalization of economies and the financial and investment markets. In Kenya the need for corporate governance, as is the case in many parts of the world, is becoming more pronounced as a way of safeguarding various stakeholders’ interests. Corporate Governance is now generally taken as an important ingredient for the economic health of companies and society regardless of one’s position in the financial investment market. The study collected primary and secondary data on the relationship between corporate governance practices and financial performance of investment managers in Nairobi Kenya. Primary data was obtained from questionnaires while secondary data was collected from company financial performance records. A total of 15 investment managers participated in the study. The study findings showed that firms had chairperson of the board different from CEO. This showed that the roles of the chair and the CEO were different. This is one of the corporate practices that investment funds needs to ensure they are adhered to. The separation of responsibilities allowed each part to work independently with less or no interference. It was also established that the roles of chairperson and chief executive offices were written down. It was established that insider shareholding and board size had significant impact on financial performance of investment managers (p<0.05).