The influence of board structure on performance of Companies listed at the Nairobi Securities Exchange

Abstract

Boardroom squabbles and business failures have been witnessed throughout the world on the corporate stage. Kenya has not been immune to the surge in corporate scandals and bankruptcy that has been sweeping the world. Essentially, the idea is that a governance problem is actually a crisis on the part of the board of directors. The bulk of these companies have failed due to a fall in shareholder value, which has been has got blame on the board of directors. The study's goal was to see how the board structure affected the performance of companies traded at the Nairobi Security Exchange. For this investigation, both primary and secondary data were acquired. The information gathered from the respondents was gathered through the use of a structured questionnaire. In addition, information was gathered from publicly available financial statements and reports for NSE-listed companies as of December 2019. simple linear regression analysis was employed to evaluate the hypothesis. The findings revealed that board structure of companies listed on the NSE has a direct and significant influence on the performance of those companies. This work has made a contribution to the agency theory and a better comprehension of the performance of companies listed on the NSE, and it has served as a reference for subsequent research. It is recommended that replication of this study should be done in other contexts like state corporations and the results be compared for generalization purposes as well as policy formulations. Future research should also focus on longitudinal approaches, this is more likely to provide additional insights into the dynamic aspects of the board structure and firms’ performance than cross-sectional studies