This document summarizes a research study that examined the influence of corporate governance on the performance of public organizations, using Kenya Ports Authority (KPA) as a case study. The study found that of the four variables studied - board composition, management compensation, governance structure, and board size - board composition had the greatest influence on performance. Specifically, the representation of outsiders and professionals on the board was found to support KPA's performance, while political influence and the number of government officials on the board was viewed as less supportive of performance. The document provides background on corporate governance and reviews relevant literature before describing the research methodology and findings.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The Journal will bring together leading researchers, engineers and scientists in the domain of interest from around the world. Topics of interest for submission include, but are not limited to
The Impact of Corporate Governance on Firms’ Profitability in Nigeriainventionjournals
The purpose of this paper is to investigate the impact of corporate governance on firms’ profitability in Nigeria. This research has been performed using a sample of 60 companies listed on the Nigeria Stock Exchange (NSE) from 2004 to 2014. The relationship between corporate governance mechanisms (board characteristics, audit committee, board independence, size, growth and profit variability) and firms’ profitability was observed. The results of the multiple regression analysis were statistically significant at 0.05 level. The F Statistics of 1.036 also shows that the result typically explained the model. The findings of the study confirmed that corporate governance mechanisms enhance firms’ profitability in Nigeria.
Using panel data from firms listed on the Nairobi Securities Exchange during the period
2004-2014, this paper examines the effect of board diversity and firm performance. Specifically the study investigates the effect of independent directors, board size, gender and financial expertise of directors and firm performance. The study finds, steadily with trends in most countries, the representation of women on the corporate board remains low. Regression results indicate that board independence has a negative and significant relationship on firm performance. The study also finds that gender diverse boards perform better as measured by Return on Assets (ROA).
Impact of corporate governance on firm performance publishedMuhammad Usman
In the light of corporate financial scandals, there is an increasing attention on corporate governance issues. The investors look for emerging economies to diversify their investment portfolios to exhaust the possibilities of returns. This paper examines the impact of corporate governance variables on firms’ performance. This Research found that there is a direct positive relationship between profitability measured either by Earnings per share (EPS) or Return on assets (ROA) and corporate governance, also have a positive direct relationship between each of liquidity, dividend per share, and the size of the company with corporate governance, finally the study found a positive direct relationship between corporate governance and corporate performance. Various studies have been conducted in developing countries including Pakistan to investigate the relationship among corporate governance and firm performance. This study indicates that corporate governance can be measured through the following elements.
(1) board size (2) Female Member (3) CEO duality (4) Education of Directors (5) Board working experience(6) independent directors (7) board compensation (8) Board ownership (9) Audit committee (10) Board composition(11)Leadership Structure
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The Journal will bring together leading researchers, engineers and scientists in the domain of interest from around the world. Topics of interest for submission include, but are not limited to
The Impact of Corporate Governance on Firms’ Profitability in Nigeriainventionjournals
The purpose of this paper is to investigate the impact of corporate governance on firms’ profitability in Nigeria. This research has been performed using a sample of 60 companies listed on the Nigeria Stock Exchange (NSE) from 2004 to 2014. The relationship between corporate governance mechanisms (board characteristics, audit committee, board independence, size, growth and profit variability) and firms’ profitability was observed. The results of the multiple regression analysis were statistically significant at 0.05 level. The F Statistics of 1.036 also shows that the result typically explained the model. The findings of the study confirmed that corporate governance mechanisms enhance firms’ profitability in Nigeria.
Using panel data from firms listed on the Nairobi Securities Exchange during the period
2004-2014, this paper examines the effect of board diversity and firm performance. Specifically the study investigates the effect of independent directors, board size, gender and financial expertise of directors and firm performance. The study finds, steadily with trends in most countries, the representation of women on the corporate board remains low. Regression results indicate that board independence has a negative and significant relationship on firm performance. The study also finds that gender diverse boards perform better as measured by Return on Assets (ROA).
Impact of corporate governance on firm performance publishedMuhammad Usman
In the light of corporate financial scandals, there is an increasing attention on corporate governance issues. The investors look for emerging economies to diversify their investment portfolios to exhaust the possibilities of returns. This paper examines the impact of corporate governance variables on firms’ performance. This Research found that there is a direct positive relationship between profitability measured either by Earnings per share (EPS) or Return on assets (ROA) and corporate governance, also have a positive direct relationship between each of liquidity, dividend per share, and the size of the company with corporate governance, finally the study found a positive direct relationship between corporate governance and corporate performance. Various studies have been conducted in developing countries including Pakistan to investigate the relationship among corporate governance and firm performance. This study indicates that corporate governance can be measured through the following elements.
(1) board size (2) Female Member (3) CEO duality (4) Education of Directors (5) Board working experience(6) independent directors (7) board compensation (8) Board ownership (9) Audit committee (10) Board composition(11)Leadership Structure
The influence of managerial ownership,institutional ownership and voluntaryd...inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Thanks to all my readers. It gives boost when I get calls from my readers and am always happy to revert back to my followers and readers. I am sorry if I am unable to reply to all the e-mails due to my busy schedule.
Contact me for any type of assignments help(nominal charges).
Thanks and Regards,
Er. Bhavi Bhatia
e-mail: bhavi.bhatia.411@gmail.com
Phone: +91-9779703714, +91-9814614666
Impact of Corporate Governance on Firms’ Financial Performance: Textile Secto...inventionjournals
Purpose: The basic standard of this article is to find out the outcome of corporate governance on firm’s profitability in textile sector of listed companies in Pakistan. Methodology: The data are collected from respective textile sector annual reports from 2005 to 2014.The results of different variables arise by using different techniques like descriptive, correlation and regression in using software of E-views in this study. Findings: These results of study explain that corporate governance and firm’s financial performance shows positive relationship between each other. This indicates that in textile sectors adopting corporate governance and plays a significant role in textile sectors. Research limitations: This study restricts by fewer digit of determinantslinked corporategovernance and data gathered from 2005 to 2014 were addressed, which restrictions the overview of the result. Further research can be conduct by using more variables and more years for finding more in future. Originality: This study shows that the firm’s performance has increased by using corporate governance in textile sector firms.
The Implication of Corporate Governance on Financial Institution’s Performanc...Waqas Tariq
Application of business ethics is sine qua non to the concept of corporate governance. Corporate governance on it own has a very significant relationship with corporate performance. This is the thrust of this paper. The Central Bank of Nigeria (CBN) bulletin of (2006) had asserted that disagreement between the board and management of financial institutions usually gives rise to board squabbles and ineffective board oversight functions. This is why the objective of this article is to determine the extent to which corporate governance practices impacts on financial institutions performance. To validate this assertion, a sample of thirty three financial institution listed on the Nigerian stock Exchange from 2004 to 2008 was used for this study. Multiple regressions Analysis and ordinary least square (OLS) method of estimation were applied. The results showed that there is a positive correlation between corporate governance practices and firms” performance. The other two performance proxies that is, Return on Equity and two corporate governance practices namely; the firms’ board size and audit committee also showed positive relationship. However, there was a negative relationship between the net profit margin, the firms’ board size and audit committee. The study could not establish a relationship between the two performance variables, namely; Return on Equity and Net profit Margin, and the executive officers’ status. In conclusion, the findings in this study are consistent with the findings of studies conducted in other countries that business ethics and good governance practices are the bed rock of optimum. It is recommended that corporate governance mechanisms be objectively structured to enhance optimal performance of corporate institutions in Nigeria.
Corporate Governance and Corporate Profitability Empirical Study of Listed La...ijtsrd
Corporate governance is concerned with ways in which all parties interested in the well- being of the organization attempt to ensure that mangers and other insiders take measures or adopt mechanisms that safeguard the interests of the stakeholders.. The purpose of the study is to find out the impact of corporate governance on profitability of listed Land and Property companies in Sri Lanka. Return of Assets is used as dependent variable. To measure the corporate governance, Board size, Board composition and independent directors of Remuneration committee. number of auditors are considered in this study. Firm size was considered as control variable in this study. The data were collected from firms annual financial reports and Data Stream over the period of 2011to 2016, from the CSE website. Descriptive statistics, correlation analysis, multiple linear regression analysis were used to analyse the data and examine the hypotheses by using the E-views 10 version, in this study. The findings revealed that there is a positive and significant relationship between ROA with auditors, board composition. Independent directors of Remuneration committee and board size are insignificantly correlated with ROA. Furthermore, it was found that the control variable firm size was insignificant in influencing firm performance ROA ..This study provides useful information for policy makers, regulators in improving the corporate governance policies in the future and also helps in increasing and understanding the relationship between corporate governance and firms performance. S. Anandasayanan | H. Thavarasasingam "Corporate Governance and Corporate Profitability: Empirical Study of Listed Land and Property Companies in Sri Lanka" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-2 , February 2019, URL: https://www.ijtsrd.com/papers/ijtsrd20309.pdf
Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/20309/corporate-governance-and-corporate-profitability-empirical-study-of-listed-land-and-property-companies-in-sri-lanka/s-anandasayanan
Corporate Governance and Earnings Quality of Listed Banks in Rivers Stateinventionjournals
This study investigated the relationship between corporate governance and earnings quality of listed banks in Rivers State. It examined the relationship between Board size and accrual quality; Audit committee independence and value relevance; and directors’ independence and accrual quality of listed banks in Rivers State. It adopted the quantitative approach in investigating the assumed relationships. Using regression analysis and Pearson product moment correlation coefficient, the result indicated a positive relationship between corporate governance and earnings quality. It revealed positive association between board size, independent directors and accrual quality. No relationship was established between independent audit committee and accrual quality. It is recommended that the existing board size should be maintained to sustain bank performance. In addition, quality and independent directors should be hired for earnings and accrual management. Finally, further study is recommended for other sectors using different research to correct the limitation of the research method and tools
Boards of Directors are not only expected to monitor a company management; they are also held
responsible for an organization’s failure to attain organizational performance goals.The purpose of this study
was to establish the relationship between board of directors’ composition, strategic leadership and performance
of commercial banks in Kenya. The specific objectives were to establish the relationship betweenboard size,
non-executive directors, and board diversityand performance of commercial banks in Kenya and the extent to
which strategic leadership moderates such relationships
In case of business, Corporate Governance is a new era. It has potential scope to find it useful though it hasn't actually been evolved from one theory. Many theories from different disciplinary area contributed to develop fundamental of corporate governance.
The influence of managerial ownership,institutional ownership and voluntaryd...inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Thanks to all my readers. It gives boost when I get calls from my readers and am always happy to revert back to my followers and readers. I am sorry if I am unable to reply to all the e-mails due to my busy schedule.
Contact me for any type of assignments help(nominal charges).
Thanks and Regards,
Er. Bhavi Bhatia
e-mail: bhavi.bhatia.411@gmail.com
Phone: +91-9779703714, +91-9814614666
Impact of Corporate Governance on Firms’ Financial Performance: Textile Secto...inventionjournals
Purpose: The basic standard of this article is to find out the outcome of corporate governance on firm’s profitability in textile sector of listed companies in Pakistan. Methodology: The data are collected from respective textile sector annual reports from 2005 to 2014.The results of different variables arise by using different techniques like descriptive, correlation and regression in using software of E-views in this study. Findings: These results of study explain that corporate governance and firm’s financial performance shows positive relationship between each other. This indicates that in textile sectors adopting corporate governance and plays a significant role in textile sectors. Research limitations: This study restricts by fewer digit of determinantslinked corporategovernance and data gathered from 2005 to 2014 were addressed, which restrictions the overview of the result. Further research can be conduct by using more variables and more years for finding more in future. Originality: This study shows that the firm’s performance has increased by using corporate governance in textile sector firms.
The Implication of Corporate Governance on Financial Institution’s Performanc...Waqas Tariq
Application of business ethics is sine qua non to the concept of corporate governance. Corporate governance on it own has a very significant relationship with corporate performance. This is the thrust of this paper. The Central Bank of Nigeria (CBN) bulletin of (2006) had asserted that disagreement between the board and management of financial institutions usually gives rise to board squabbles and ineffective board oversight functions. This is why the objective of this article is to determine the extent to which corporate governance practices impacts on financial institutions performance. To validate this assertion, a sample of thirty three financial institution listed on the Nigerian stock Exchange from 2004 to 2008 was used for this study. Multiple regressions Analysis and ordinary least square (OLS) method of estimation were applied. The results showed that there is a positive correlation between corporate governance practices and firms” performance. The other two performance proxies that is, Return on Equity and two corporate governance practices namely; the firms’ board size and audit committee also showed positive relationship. However, there was a negative relationship between the net profit margin, the firms’ board size and audit committee. The study could not establish a relationship between the two performance variables, namely; Return on Equity and Net profit Margin, and the executive officers’ status. In conclusion, the findings in this study are consistent with the findings of studies conducted in other countries that business ethics and good governance practices are the bed rock of optimum. It is recommended that corporate governance mechanisms be objectively structured to enhance optimal performance of corporate institutions in Nigeria.
Corporate Governance and Corporate Profitability Empirical Study of Listed La...ijtsrd
Corporate governance is concerned with ways in which all parties interested in the well- being of the organization attempt to ensure that mangers and other insiders take measures or adopt mechanisms that safeguard the interests of the stakeholders.. The purpose of the study is to find out the impact of corporate governance on profitability of listed Land and Property companies in Sri Lanka. Return of Assets is used as dependent variable. To measure the corporate governance, Board size, Board composition and independent directors of Remuneration committee. number of auditors are considered in this study. Firm size was considered as control variable in this study. The data were collected from firms annual financial reports and Data Stream over the period of 2011to 2016, from the CSE website. Descriptive statistics, correlation analysis, multiple linear regression analysis were used to analyse the data and examine the hypotheses by using the E-views 10 version, in this study. The findings revealed that there is a positive and significant relationship between ROA with auditors, board composition. Independent directors of Remuneration committee and board size are insignificantly correlated with ROA. Furthermore, it was found that the control variable firm size was insignificant in influencing firm performance ROA ..This study provides useful information for policy makers, regulators in improving the corporate governance policies in the future and also helps in increasing and understanding the relationship between corporate governance and firms performance. S. Anandasayanan | H. Thavarasasingam "Corporate Governance and Corporate Profitability: Empirical Study of Listed Land and Property Companies in Sri Lanka" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-2 , February 2019, URL: https://www.ijtsrd.com/papers/ijtsrd20309.pdf
Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/20309/corporate-governance-and-corporate-profitability-empirical-study-of-listed-land-and-property-companies-in-sri-lanka/s-anandasayanan
Corporate Governance and Earnings Quality of Listed Banks in Rivers Stateinventionjournals
This study investigated the relationship between corporate governance and earnings quality of listed banks in Rivers State. It examined the relationship between Board size and accrual quality; Audit committee independence and value relevance; and directors’ independence and accrual quality of listed banks in Rivers State. It adopted the quantitative approach in investigating the assumed relationships. Using regression analysis and Pearson product moment correlation coefficient, the result indicated a positive relationship between corporate governance and earnings quality. It revealed positive association between board size, independent directors and accrual quality. No relationship was established between independent audit committee and accrual quality. It is recommended that the existing board size should be maintained to sustain bank performance. In addition, quality and independent directors should be hired for earnings and accrual management. Finally, further study is recommended for other sectors using different research to correct the limitation of the research method and tools
Boards of Directors are not only expected to monitor a company management; they are also held
responsible for an organization’s failure to attain organizational performance goals.The purpose of this study
was to establish the relationship between board of directors’ composition, strategic leadership and performance
of commercial banks in Kenya. The specific objectives were to establish the relationship betweenboard size,
non-executive directors, and board diversityand performance of commercial banks in Kenya and the extent to
which strategic leadership moderates such relationships
In case of business, Corporate Governance is a new era. It has potential scope to find it useful though it hasn't actually been evolved from one theory. Many theories from different disciplinary area contributed to develop fundamental of corporate governance.
Impact of Corporate Governance on Organizational PerformanceJenıstön Delımä
Citation: Delima, V. J., & Ragel, V. R. (2017). Impact of corporate governance on organizational performance. International Journal of Engineering Research and General Science, 5(5).
Abstract- This study examined whether corporate governance has impact on organizational performance in Financial Institutions as research problem. This research was carried out with objective to measure association between Corporate Governance and Financial Institution’s Performance in Batticaloa district. Conceptual framework has been developed to measure linkages between Corporate Governance and Financial Institution’s Performance. Board Size, Corporate Governance Mechanism, Communication Strategies, and Code of Conduct are considered as the measurement variables of Corporate Governance which was derived from Changezi & Saeed (2013) and Customer Satisfaction, Employee Commitment and Corporate Reputation are considered as the measurement variable of Organizational Performance which was derived from Bayoud (2012) and Carton (2004). Questionnaires were used to collect data for this study. 115 Management Respondents and 115 Customers from whole Financial Institutions in Batticaloa district have been selected for this study. Data were analyzed and evaluated by Univariate and Bivariate techniques. In Univariate analysis, Descriptive statistic has been used for the analysis. In Bivariate analysis, Correlation and multiple regressions have been used for the analysis. Findings have shown the Corporate Governance and Organizational Performance are at high level. Moreover, it also found that there is a strong positive relationship between Corporate Governance and Organizational Performance. Corporate Governance significantly impacts Organizational Performance of Financial Institutions. These findings would be useful to consider more on Corporate Governance practices to avoid the Corporate Collapses and to achieve successful Organizational Performance
r Academy of Management Journal2015, Vol. 1015, No. 1, 1–9..docxmakdul
r Academy of Management Journal
2015, Vol. 1015, No. 1, 1–9.
http://dx.doi.org/10.5465/amj.2014.4006
FROM THE EDITORS
RETHINKING GOVERNANCE IN MANAGEMENT RESEARCH
In the field of management, the study of gover-
nance has primarily dealt with decision-making by
boards of directors, chief executives, and senior
managers. The corporate governance literature has
generated important insights regarding incentive
alignment, risk taking, and coordination chal-
lenges. Emerging trends, highlighted in this issue,
raise new questions regarding managerial roles,
organizational contexts, internal and social pro-
cesses, and changes in governance over time. We
encourage management scholars to rethink their
approach to governance research by considering
stakeholder engagement, the implications of big
data, social impact, global dimensions, and com-
parative analysis of governance. A broadened con-
ceptualization of governance may also deal with the
dynamics of interorganizational arrangements, in-
cluding the co-creation of organizations of varying
governance forms.
WHAT IS GOVERNANCE?
In this “thematic issue,” we assembled articles
that reflect evolving practices in governance.1
Corporate governance is the system by which
companies are directed and controlled. Boards of
directors are responsible for the governance of
their companies. The shareholders’ role in gover-
nance is to appoint the directors and the auditors
and to satisfy themselves that an appropriate gov-
ernance structure is in place. The responsibilities
of the board include setting the company’s strategic
aims, providing the leadership to put them into
effect, supervising the management of the business,
and reporting to shareholders on their stewardship.
The board’s actions are subject to laws, regulations,
and the shareholders in general meeting (Cadbury,
1992). Corporate governance is therefore about
what the board of a company does and how it sets
the values of the company, but is distinct from the
operational management of the company by full-
time executives.
These views of corporate governance stem pre-
dominantly from a financial perspective. For ex-
ample, Shleifer and Vishny (1997: 737) address
corporate governance as “the ways in which sup-
pliers of finance to corporations assure themselves
of getting a return on their investment. How do the
suppliers of finance get managers to return some
of the profits to them? How do they make sure
that managers do not steal the capital they supply
or invest it in bad projects? How do suppliers
of finance control managers?” These views stem
primarily from an agency theoretical perspective
that investigates the consequences of separation of
ownership and control in the modern corporation
(Jensen & Meckling, 1976). Recent corporate ac-
tivity and views, however, have an expanded view
of governance as involving stewardship and lead-
ership, in addition to the narrower financial pru-
dence role. From a survey of board members from
15 countri ...
Brennan, Niamh M. [2010] “A Review of Corporate Governance Research: An Irish...Prof Niamh M. Brennan
An overview of corporate governance is provided in this chapter, commencing with a discussion of alternative definitions of governance. Internal and external mechanisms of governance are described. The role of boards of directors, and theories explaining those roles, are also considered. In order to provide some insights into governance research, 15 academic papers with an Irish angle were selected for analysis, by reference to theoretical perspective, governance mechanism studied, research method adopted and results. The analytical table demonstrates the variety of research conducted. Some concluding comments are then drawn.
This study attempts to investigate the role of Corporate Governance in mitigating agency cost. For
this purpose a sample of 100 firms selected on the basis of 100 INDEX of Karachi Stock Exchange during the
period 2007 to 2011. To do so, alternative proxies for agency costs are employing: the ratio of total sales to total
assets (asset turnover) and the ratio of selling, general & administrative expenses (SG&A) to total sales.
Multivariate fixed effect regression is used to analyze the data. The explanatory variables include director
ownership, institutional ownership, ownership Concentration, board size, CEO/Chair duality, Non Executive
Directors, Debt Ratio, remuneration structure and board independence. The analysis is controlled for the
influence of company size. The results show that higher director and institutional ownership reduces the level of
agency cost. Smaller sized boards also results in lowering agency cost. Board independence has positive
association with asset utilization ratio. The separation of the post of CEO and chairperson and higher
remuneration lower agency cost. Bank debt constitutes one of the most important Corporate Governance devices
for Pakistani Listed Companies. Also, managerial ownership, managerial compensation and ownership
concentration seem to play an important role in mitigating agency costs
The Relationship between Board Tenure and Financial Performance. The Allegian...IJMREMJournal
PURPOSE: The purpose of this paper was to examine the relationship between the tenure of the board and
financial distress of listed firms in Kenya.
DESIGN/METHODOLOGY: The research design used in this study was exploratory design. The study employed
panel regression analysis and simultaneously used pooled regression and random effects on sample size of 57
listed firms in Kenya during the period of 2007-2016.
FINDINGS: The study found that board tenure was found to be negatively and significantly related to financial
performance (β=-0.091; p<0.01).
THEORETICAL IMPLICATIONS: This study adds value to theory by studying the effect of tenure on
financial performance by updating empirical literature from a developing country.
ORIGINALITY: The paper fills an important gap in academic literature by providing insights into the role of
board tenure in performance of firms particularly in developing economies. In addition, given the increasing
collapsing of companies in developing nations, this paper provides policy makers with evidence on the
implications of board composition on financial distress.
Article: Influence of Corporate Board Characteristics on Firm Performance of ...McRey Banderlipe II
Using disclosure information from 29 listed property companies in the Philippines, the results revealed that managerial ownership positively influences firm performance. Moreover, firm size, leverage, and age influence the accounting-based measures of performance to a great extent than the market-based measures. Further research should focus on the overall impact of corporate governance using different measures of performance to better assist the decision making of the company’s stakeholders.
Impact of corporate governance on firm performance publishedMuhammad Usman
In the light of corporate financial scandals, there is an increasing attention on corporate governance issues. The investors look for emerging economies to diversify their investment portfolios to exhaust the possibilities of returns. This paper examines the impact of corporate governance variables on firms’ performance. This Research found that there is a direct positive relationship between profitability measured either by Earnings per share (EPS) or Return on assets (ROA) and corporate governance, also have a positive direct relationship between each of liquidity, dividend per share, and the size of the company with corporate governance, finally the study found a positive direct relationship between corporate governance and corporate performance. Various studies have been conducted in developing countries including Pakistan to investigate the relationship among corporate governance and firm performance. This study indicates that corporate governance can be measured through the following elements.
(1) board size (2) Female Member (3) CEO duality (4) Education of Directors (5) Board working experience(6) independent directors (7) board compensation (8) Board ownership (9) Audit committee (10) Board composition(11)Leadership Structure
Audit Committee Characteristics and Financial Performance of Deposit Money Ba...AkashSharma618775
The purpose of this study was to assess the predictive power of audit committee features on the financial
performance of listed Deposit Money Banks (DMBs) in Nigeria between 2009 and 2018. Thirteen (13) banks were
used over 10 years making a total of 130 firm year observation. The independent variable was audit committee
size, while the dependent variable was DMB financial performance measured by return on capital employed
(ROCE). The study used an ex-post factor research approach to address the research questions and the nature of
the study data. The study used the panel fixed effect approach (and the estimates were obtained using E-views 9).
The results show that audit committee size does not significantly predict ROCE nor does audit committee financial
skill and frequency of audit committee meetings. None of the independent variables have significant predictive
power on the performance of Deposit Money Banks in Nigeria. Thus, instead of DMBs focusing on expanding the
members of Audit committee, they should instead consider other things that can be done to have an effective audit
committee, such as gender, religion, region, ownership, etc that could possibly influence the performance of banks
in Nigeria.
Capital Structure andCorporate Governance practices. Evidence from Listed Non...IOSR Journals
This paper examines the impact of corporate governance on capital structure for firms listed on NSE Kenya. The total population of non-financial firms is 50.A sample of 30 companies whose data for 5 years from 2007-2011 was selected. The study uses five corporate governance proxies: Board size (BS), Ownership concentration (ONC), Institutional share ratio (ISR), CEO duality (CED), Board independence (BI) as independent variables. Four capital structures variables are: Long term debt to asset ratio (LTDA), Short term debt to asset ratio (STDA), Debt equity ratio (DE), and Total debt to asset ratio (TD) as dependent variables. The analysis used both descriptive and inferential analysis where correlation and linear regression were used.An average of 7 directors are on the board of firms with 93% of firms CEO doubling as a director.Using model 1 regression equation positive correlation is shown between TD with corporate governance proxies CED which is significant at 95% significant level. Using model 2 regression equation size of the firmSz taken as natural logarithm of sales as a moderating variable CED is negatively correlated to STD and DE and is significant implying firms tend to adopt pecking order theory to avoid more debt
Similar to Influence of corporate governance on the performance of public organizations in kenya (a case of kenya ports authority) (20)
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
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Influence of corporate governance on the performance of public organizations in kenya (a case of kenya ports authority)
1. Research Journal of Finance and Accounting www.iiste.org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol.4, No.6, 2013
205
Influence of Corporate Governance on the Performance of Public
Organizations in Kenya (a Case of Kenya Ports Authority)
Sicily Gachoki1
Gladys Rotich1,2
Jomo Kenyatta University of Science and Technology,
P.O Box 620000 0020 Nairobi, Kenya
Email: cessgachoki@gmail.com *Email: gchepkirui@gmail.com
Abstract
Corporate governance is a combination of corporate policies and best practices adopted by the corporate
bodies to achieve their objectives in relation to their stakeholders (Mallin, 2007). It has been increasingly
recognized in public organizations that appropriate corporate governance arrangements are a key element in
corporate success (Meredith & Robyn, 2005). They form the basis of a robust, credible and responsive
framework necessary to deliver the required accountability and bottom line performance consistent with
an organization’s objectives. Corporate governance in Kenya has been an important topic because of
corporate scandals such as the recent complaints on the composition of the board members in the state
corporations against the tribal lines basis. Mismanagement, bureaucracy, wastage, pilferage
incompetence and irresponsibility by directors and employees are pointed out in the sessional paper 4 of
Government of Kenya as the main problems that have made State Corporations (SC’s) fail to achieve
their objectives (Reuters, 2004). Kenya’s entities have had a history of poor governance system with
about 70% of the scandals attributed to weak corporate governance practices, lack of internal controls,
and weaknesses in regulatory and supervisory systems as well as conflict of interest. Albeit a lot of
literatures have drawn much emphasis on the relationship between corporate governance and ownership
and on the relationships little is known about the influence of the corporate governance on performance
of public organization. The factors considered include; Board composition, Management compensation,
Governance structure and Board size. Kenya Ports Authority (KPA) is the case study in this study. The
sample size was 251 respondents of KPA’s employees. The study used primary data collected using
questionnaires which were given to the respondents at their places of work. Out of the four variables
studied it was found that the board composition had a greater influence on the performance of public
organizations. The study recommends, among others, that the government should therefore enforce the
measures it has laid down on corporate governance to ensure public organizations are following them so
that the recommended governance structures are followed.
Keywords: Corporate governance, State Corporation, Board
1. Introduction
The study sought to establish the influence of corporate governance on the performance of public
organizations. A case of Kenya Ports Authority (KPA) was used. Corporate governance is a matter of vital
concern for all corporations, large or small, publicly traded or privately held. In Kenya, the policy discussion on
corporate governance has focused almost exclusively on publicly traded companies because it is in these
enterprises that failures of corporate governance have the most serious and far reaching consequences for the
economies of the countries concerned.
Globally, corporate governance has received increased attention because of high-profile scandals stemming from
excessive managerial compensation, various abuse of corporate power, recent events, such as the financial crisis
that began in mid-2007 and other corporate governance failures (Transparency International, 2010). Corporate
governance enhances performance of the corporation by motivating manager to maximize returns on investment,
raising operational efficiencies and ensuring long- term productive growth (Coughlin & Schmidt, 1985). Good
corporate governance practices can strongly contribute to market development and corporate stability. Without
governance mechanisms in place – in particular, a board to direct and control - managers might ‘run away with
the profits’. Understood this way, good governance minimizes the possibility of poor organizational performance
(Meredith & Robyn, 2005).
The challenging task facing policy makers is to design corporate governance frameworks that are secure and benefits
all shareholders at large as effective monitors of management whilst preventing them from extracting excessive
private benefits of control (Bebchuck et al 2004). Since the early 1990s, many prominent politicians were implicated
in Scandals such as the Goldenberg, in which the Kenyan government paid over $600 million for non-existent gold
and diamond exports. There has been renewed interest concerning issues of corporate governance in Kenya, however,
relevant data from empirical studies are still few and far between.
2. Research Journal of Finance and Accounting www.iiste.org
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1.1 Purpose of the study
The study offers valuable contributions from both theoretical and practical points of view. Theoretically, it
contributes to the general understanding of the influence of corporate governance on the performance of public
organizations. From the practical standpoint, the study contributes greatly on the ongoing debate on corporate
governance.
This study answers the following questions: (1) how do governance structures affect the performance of public
organizations? (2) In what ways do the management compensation programs affect the performance of public
organizations? (3) In which ways does the board composition affect the performance of public organizations? (4)
How does the board size influence the performance of public organizations?
Governance in the SC’s has become very sensitive issue lately, especially in Kenya due to the allegations of division
along tribal lines. Therefore, the readiness of respondent to answer some questions was an issue. Most of the data
especially to do with SCs scandals was not easily accessible and it’s scanty. Kenya Port Authority is one of the
entities found to be relevant to this study. The port of Mombasa can trace its history back many centuries to a time
when dhows called at the Old Port on the north side of Mombasa Island. In 1977, the running of Kenya’s ports was
taken over by the national government, which established the Kenya Ports Authority (KPA) in 1978. The Kenya Port
Authority’s mandate is to maintain, operate, improve and regulate all scheduled sea ports situated along Kenya’s
coastline. One of the objectives of KPA is to Instill sound corporate governance practices over and above its aim of
developing, maintaining and sustaining port facilities and infrastructure to meet the customer needs.
2. Theoretical Review
2.1Agency theory of board composition
Jiatao (1994) developed hypotheses that link the board composition (percentage of outside directors on the board)
with three major dimensions of ownership structures and how it affects performance based on agency theory. The
effects of these ownership structure variables on board composition will shed light on the governance and control
process of firms under different national types of institutional arrangement.
Larcker et al (2004) asserts that because of the agency problem between managers and owners (who are assumed to
be represented by the outside directors), neither party will choose to communicate his or her information fully to the
other. Outsiders are assumed to control agency problems by making some decisions themselves. When they do, the
failure of insiders to communicate their information fully becomes costly. Since outsiders don’t always delegate the
decision to insiders optimally, shareholders can sometimes be better off by having boards controlled by insiders.
2.2 Resource dependency theory of board size.
Jensen & Meckling (1976) argue that board size is better explained by resource dependency theory. This theory
suggests that firms examine both the costs and benefits of large boards in determining optimal board size. It suggests
that companies are better off with large boards since each new board member brings both expertise and access to
resources.
Having more board members would, therefore, provide the firm with greater expertise and access to resources. These
resources could include access to markets, access to new and better technologies, and access to raw materials among
other things. Large boards are more likely to contain directors with greater diversity in education and industry
experience (Jensen & Meckling, 1976). This diversity allows the board members to provide management with high
quality advice.
2.3 Normative deliberative theory of governance structure
Normative deliberative theory of governance has been proposed by Hajer & Wagenaar (2003) and asserts that
governance is explicitly about opening up the participatory processes of democracy, and the importance of language
and interpretation in policy-making which determines the performance of a firm. It further argues that the core
theme of governance is the same: deliberative governance refers to new places where politics are made under
conditions of radical uncertainty and interdependence.
2.4 Agency theory of Compensation
Agency theory by Coughlin & Schmidt (1985) asserts that remuneration contracts are efficient if the level of
compensation is linked to aspects of performance over which managers have some control. Otherwise, executives
would not have any incentive to engage in significant effort to increase firm performance since they know they will
be compensated regardless of the performance of the firm. However, Donaldson & Davis (1991) established that it is
harder for an executive manager to claim that the company has performed poorly due to general market conditions if
other benchmark companies are performing well. This says that contracts, in order to be efficient, we should relate
compensation to rises in relative performance e.g. the performance of industry peers or direct competitors.
3. Research Journal of Finance and Accounting www.iiste.org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol.4, No.6, 2013
207
3. Conceptual Framework
A conceptual framework is a structure of the research idea or concept and how it is put together which elaborates the
research problem in relation to relevant literature. It’s summarized in a schematic diagram that presents the major
variables and their hypothesized relationships (Cross et al, 1989). For this study the conceptual framework is
summarized as follows.
Independent variables Dependent variable
Figure 1 Conceptual framework
4. Empirical Review
While the empirical evidence confirms the substitutive effects between direct monitoring by owners and
compensation incentives, board monitoring or monitoring by institutional investors may also substitute for direct
shareholder monitoring (Cosh & Hughes, 1997). In theory at least, the use of these other mechanisms should also
reduce the level of pay-incentives needed to align managers’ incentives with those of shareholders. In practice,
however, board members become like management and agency costs are expected. Mehran (1995) finds empirical
evidence to support this view. He finds that the presence of outside directors, rather than decreasing the level of
executive remuneration, actually increases the percentage of equity-based compensation.
Kiel & Nicholson (2004) asserts that there is an “inverted U” relationship between board size and performance in
which adding directors can bring the board to an optimal skills/experience mix level. A study by Larcker et al (2004)
suggests that eight board members is described as “typical” while Leblanc & Gillies (2003) noted that eight to eleven
board members is viewed as optimal. A study by Miring’u & Muoria (2011) found out that the board should neither
be too large like 14 members and above nor too small like below 5 so as not to compromise the inter-active
discussion during board meeting or to limit inclusion of a wider expertise and skills that are necessary for the board
to be effective.
According to CCG (2004) the board should ensure that a proper management structure [organization, systems and
people] is in place and make sure that the structure functions to maintain corporate integrity, reputation and
responsibility. Systems and structures can provide an environment conducive to good corporate governance practices,
but at the end of the day it is the acts or omissions of the people charged with relevant responsibilities that will
determine whether governance objectives are in fact achieved.
Systems and structures can provide an environment conducive to good corporate governance practices, but at the end
of the day it is the acts or omissions of the people charged with relevant responsibilities that will determine whether
governance objectives are in fact achieved. Cairnes (2003) study which puts emphasis on the interaction of human
behaviour with corporate governance practices and structures, provides a useful list of early warning signs of bad
board behaviours.
Bhagat & Black (2002) undertook the first large sample survey to test whether the degree of board independence
correlates with various measures of long-term company performance. They found that, “firms with more independent
boards do not perform better than other firms. However, Hermalin & Weisbach (1991) reported that changes in board
composition paralleled changes in the level of corporate expect that as diversification increases, the representation of
out- siders improves performance. A sample literature reviews reveals a gap in that there is paucity of study about
corporate governance influence on the performance. This study contributes to the literature by filling a gap of
corporate governance influence on performance of public organizations.
Performance of public
organizations
Governance structure
Board Size
Compensation Programs
Board Composition
4. Research Journal of Finance and Accounting www.iiste.org
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol.4, No.6, 2013
208
5. Research Design Data Analysis and Processing.
The use of open and closed questionnaires contributed towards gathering of quantitative and qualitative data.
Quantitative data collected was keyed in and cleaned in a statistical programme for processing. SPSS Version 17 has
got descriptive statistics features that assist in variable response comparison and gives clear indication of responses
frequencies (Dempsey, 2003). A descriptive research design was adopted in this study. Descriptive technique
including mean of the outcome was calculated for each variable. The data was then be analyzed using multiple
regression technique where the relationship between the independent and dependent variable was determined. A pilot
study was carried out to test the reliability and validity of the questionnaires which helped establish whether the
instruments are comprehensive to elicit the intended information exhaustively.
The population in target was KPA employees’ of about 6000 at all three levels of management, including top level,
middle level and lower level of management. This study used the purposive sampling technique to identify the
sample of 251 from the employees. Data was collected using quantative method through the use of a questionnaire.
The open and closed questionnaires were administered to a total of fifty respondents which was later analyzed.
Table 1:
Sampling frame
Sections Population
(Frequency)
Sample
Ratio
Sample
Top management 25 0.2 5
Middle level
management 35 0.2 7
Low level management 188 0.2 38
Total 251 0.2 50
Source: Author, (2012)
6. Research findings and discussion.
Out of the 50 questionnaires sent to the sampled population, consisting of the staff working in KPA, ICDE, 37
questionnaires were returned completely filled which makes a response rate of 74%. The commendable response rate
was achieved after the researcher made telephone calls and personally administered the questionnaires. Each
respondent was briefly introduced to the intent of the study and how his/her contribution would highly add value to
the study.
This response was in line with Mugenda (2003) recommendation of an acceptable response rate of more than 60% of
the sample which is adequate to small population whereas a response rate of more than 40% is required for big
population. Mugenda indicates that high response rate reduces the risk of bias in the responses and if the response
rate is very low the researcher should find out the reason behind non responses and whether those can jeopardize the
outcome of the study.
Board composition
The study sought to establish the extent to which board composition influence the performance of KPA. The board
composition is the insiders and outsiders represented in the board. It also defines the political and professionals in the
board of an organization.
The result on board composition indicated that respondents felt the board control by outsiders is sufficient to support
the performance of KPA. A score of a mean of 4.4 shown that the respondents agreed with the sentiments of good
board composition of outsiders and a score of a mean of 4.1 on insiders showed that the insider directors are well
represented.
Table 2
Board composition Mean
Board control by outsiders is sufficient to support performance 4.4
Insiders are well represented in the board to ensure performance 4.1
Number of Port professionals in the Board are adequate to ensure
performance of KPA 4.4
Government officials in the board are controlled to ensure performance 3.6
Number of years of a member in the board supports KPA performance 3.84
Number of politicians in the board are well controlled to boost KPA
performance 4.56
5. Research Journal of Finance and Accounting
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online
Vol.4, No.6, 2013
Board size
The study was geared to establish whether the board size in KPA supports its perform
referring to the number of members in the board. The respondents were asked whether the board present is sufficient
to support performance. From table 3, a score of 3.75 mean from the number of members in the Board indicates th
the number of board members was deemed to be sufficient to support the performance of KPA. Table 3 further
illustrates that the board independence had a score of 4.43 suggesting that the KPA board is deemed to be
independent enough to support the perfor
points out that there are other reasons for appointing independent directors to the board: to ensure an appropriate mix
of skills and expertise to govern effectively
available in- house; to help ensure board diversity, in turn minimizing ‘group think’; and to gain access to external
business and other contacts information and resources.
Table 3 Board size
Board size
Number of members in the board are sufficient to support performance
Number of independent in the board are sufficient to support performance
The replaced members in the board are few to reflect KPA good performance
Board members retire by rotation to support good performance of KPA
Professional members are adequate in the board to support KPA performance
Number of sacked members within the board the last three years is few to reflect
KPA good performance.
Governance structure
The study sought to establish the whether the governance structure in place supports the performance of KPA. This is
presented in the figure shown below. Findings presented indicate that 56% of the respondent felt that th
structure in place supports KPA performance. On the other hand 44% were of the opinion that the governance
structure in place does not support the performance of KPA.
Figure 2
Compensation Programs.
The study aimed at finding out the whether the compensation programs adequately supports the performance of
KPA. The results were illustrated in the figure below.
Governance structure
2847 (Online)
209
The study was geared to establish whether the board size in KPA supports its performance. Board size was largely
referring to the number of members in the board. The respondents were asked whether the board present is sufficient
to support performance. From table 3, a score of 3.75 mean from the number of members in the Board indicates th
the number of board members was deemed to be sufficient to support the performance of KPA. Table 3 further
illustrates that the board independence had a score of 4.43 suggesting that the KPA board is deemed to be
independent enough to support the performance of KPA. This concurs with Nicholson & Kiel (2004) study which
points out that there are other reasons for appointing independent directors to the board: to ensure an appropriate mix
of skills and expertise to govern effectively – in particular, to facilitate good decision-making
house; to help ensure board diversity, in turn minimizing ‘group think’; and to gain access to external
business and other contacts information and resources.
Number of members in the board are sufficient to support performance
Number of independent in the board are sufficient to support performance
The replaced members in the board are few to reflect KPA good performance
d members retire by rotation to support good performance of KPA
Professional members are adequate in the board to support KPA performance
Number of sacked members within the board the last three years is few to reflect
The study sought to establish the whether the governance structure in place supports the performance of KPA. This is
presented in the figure shown below. Findings presented indicate that 56% of the respondent felt that th
structure in place supports KPA performance. On the other hand 44% were of the opinion that the governance
structure in place does not support the performance of KPA.
the whether the compensation programs adequately supports the performance of
KPA. The results were illustrated in the figure below.
56%
44%
Governance structure
Yes
No
www.iiste.org
ance. Board size was largely
referring to the number of members in the board. The respondents were asked whether the board present is sufficient
to support performance. From table 3, a score of 3.75 mean from the number of members in the Board indicates that
the number of board members was deemed to be sufficient to support the performance of KPA. Table 3 further
illustrates that the board independence had a score of 4.43 suggesting that the KPA board is deemed to be
mance of KPA. This concurs with Nicholson & Kiel (2004) study which
points out that there are other reasons for appointing independent directors to the board: to ensure an appropriate mix
making - if they are not
house; to help ensure board diversity, in turn minimizing ‘group think’; and to gain access to external
Mean
3.75
4.43
3.72
3.8
4.2
3.1
The study sought to establish the whether the governance structure in place supports the performance of KPA. This is
presented in the figure shown below. Findings presented indicate that 56% of the respondent felt that the governance
structure in place supports KPA performance. On the other hand 44% were of the opinion that the governance
the whether the compensation programs adequately supports the performance of
6. Research Journal of Finance and Accounting
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online
Vol.4, No.6, 2013
Figure 3
Source: Field Survey (2012)
Findings presented indicates that 31% of the respondent were of the opinion that
supports the performance of KPA while 69% do not agree that the compensations programs put in place supports the
performance of KPA. Most of the disagreement was raised from the lower level of management who felt that the
compensation programs were not supportive enough. This results were in line with those of Lawrence &
(2004) in which their study on Corporate Governance and Firm Performance found out that independent board of
directors, nominating committees, and compens
suggesting that these exchange requirements may facilitate good performance.
7. Regression Analysis
In this study, a multiple regression analysis was conducted to test the influe
variables. The research used statistical package for social sciences (SPSS) to code, enter and compute the
measurements of the multiple regressions. The regression equation below has established that taking all factors into
account (board composition, board size, and governance structure and compensation programs) influenced the
performance of KPA.
Table 4: Model summary
Model R R Square
1 .875(a) .76625
a independent variable α, X1, X2, X3,
Table 5: ANOVA (b)
Model Sum of squares
1 Regression
Residual
37.537
6.6903
a independent variable α, X1, X2, X3,
b dependent variable: Y
Equation: (Y = β0 + β1X1 + β2X
0.883X4
31%
Compensation programs
2847 (Online)
210
Findings presented indicates that 31% of the respondent were of the opinion that the compensation programs
supports the performance of KPA while 69% do not agree that the compensations programs put in place supports the
performance of KPA. Most of the disagreement was raised from the lower level of management who felt that the
ation programs were not supportive enough. This results were in line with those of Lawrence &
(2004) in which their study on Corporate Governance and Firm Performance found out that independent board of
directors, nominating committees, and compensation committees are associated with good firm performance,
suggesting that these exchange requirements may facilitate good performance.
In this study, a multiple regression analysis was conducted to test the influe
variables. The research used statistical package for social sciences (SPSS) to code, enter and compute the
measurements of the multiple regressions. The regression equation below has established that taking all factors into
(board composition, board size, and governance structure and compensation programs) influenced the
R Square Adjusted R Square Std. Error of the Estimate
.76625 .766232 2.04485
3, X4
Sum of squares df Mean square F
5
63
7.50745
0.1854
4.406
3, X4
X2 + β3X3 + β4X4+ ε) becomes; Y=1.492 + 0.617X
69%
Compensation programs
No
Yes
www.iiste.org
the compensation programs
supports the performance of KPA while 69% do not agree that the compensations programs put in place supports the
performance of KPA. Most of the disagreement was raised from the lower level of management who felt that the
ation programs were not supportive enough. This results were in line with those of Lawrence & Marcus
(2004) in which their study on Corporate Governance and Firm Performance found out that independent board of
ation committees are associated with good firm performance,
In this study, a multiple regression analysis was conducted to test the influence among predictor
variables. The research used statistical package for social sciences (SPSS) to code, enter and compute the
measurements of the multiple regressions. The regression equation below has established that taking all factors into
(board composition, board size, and governance structure and compensation programs) influenced the
Std. Error of the Estimate
2.04485
Sig
.003
1.492 + 0.617X1+ 0.702X2+ 0.596X3+
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Table 6 Regression Coefficients
Unstandardized
Coefficients
Beta t Sig.B Std. Error
Equation 1 (Constant) 15.75 0.842 4.009 0.000
Board composition 0.617 0.145 -0.330 2.276 0.0115
Board size 0.702 0.165 -0.089 0.849 0.0097
Compensation
programs
0.596 0.116 0.080 0.673 0.0074
Governance structure 0.883 0.113 0.032 -0.408 0.0083
From table above, R-Squared is a commonly used statistic to evaluate model fit. R-square is 1 minus the ratio of
residual variability. From the above table 4, the adjusted R2, also called the coefficient of multiple determinations, is
the percent of the variance in the dependent explained uniquely or jointly by the independent variables (board
composition, board size, and governance structure and compensation programs) 76.6% of the performance of KPA
could be attributed to the combined effect of the predictor variables. Analysis of variance (ANOVA) above was used
to investigate the degree of relationship between the variables of the study indicating the strength and the
direction of association of each variable.
The probability of 0.03 indicates that the regression relationship was highly significant in predicting the influence of
corporate governance on the performance of public sector. As per the SPSS generated table above, the equation; the
F-critical at a 5% level of significance was 4.406 since F calculated is greater than the F critical (value = 2.830), this
shows that the overall model was significant (Table 6).
As per the SPSS generated in table 5, the equation; (Y = β0 + β1X1 + β2X2 + β3X3 + β4X4+ ε) becomes; Y=1.492
+ 0.617X1+ 0.702X2+ 0.596X3+ 0.883X4. The equation above was established through taking into considerations
all factors into account (board composition, board size, and governance structure and compensation programs). A
standard deviation of 45 in the board composition shows that, board composition to a greater extent influence the
performance of public organizations.
8. Results and Findings
The study targeted 251 respondents in KPA in collecting data with regard to the influence of corporate governance
on the performance of public organizations. From the findings, 32.8% had served in KPA between 6-10 yrs, 23.9%
between 1-5 years and 11-15 years respectively, 11.9% between 16-20 years while 7.5% had served for over 21 years
in KPA respectively. Male respondents were 70.1% whilst the female respondents were represented by 29.9%. The
study also required the respondents to indicate the highest level of education achieved. According to the research
findings, 44.8% had degree certificates, 32.8% had masters while 22.4% had diploma certificates respectively. The
respondents agree with the sentiments of good board composition of outsiders and the insider directors too are well
presented. Also the respondents agreed the board members were sufficient to support the performance of KPA.
9. Recommendations
The study recommends among other things that the government ought to enforce the measures it has laid down on
corporate governance to ensure public organizations are following them so that the recommended governance
structures are followed. The concerned ministries should also be very keen in the supervisory role through the
relevant committees to ensure that all regulations are enforced as required e.g. the board elected is independent. The
government should ensure that the number of politicians sitting on the board in public organizations depends on the
firm size, its juridical form, ownership structure and industry.
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10. Recommendations for Further Studies
The study purports that good performance of public organizations is influenced in a way by corporate governance.
However, the study does not openly rule out the fact that some other variables in the environment could be critical for
public organizations performance. Hence, future research could usefully focus on corporate governance practices in
other state corporations like the non – commercial state corporations comprising those that are of regulatory,
educational, research institutes, and other institutions.
11. Conclusion
The study concludes that sufficient evidence emerged showing that it is necessary to embark on good board
composition in public organizations which supports them in achieving better performance. According Hermalin and
Weisbach (1998) those entities that are performing relatively well are those that have embraced corporate governance
in their organization. Further, the study established most public organizations have opted to have relatively large
board numbers whilst there are different group compensation systems as there are group practices, and each system
has its own strengths and weaknesses.
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Performance. Research study commissioned by Institutional of Shareholders Services.
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Performance of Commercial State Corporations in Kenya. Available at: http//:www.journals.mku.ac.ke
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21) Nicholson, R., Gavin J. & Kiel, H. (2004). A Framework for Diagnosing Board Effectiveness. Corporate
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APPENDICES
Appendix I: A letter.
The Manager
Inland Container Depot,
Nairobi
RE: REQUEST FOR DATA COLLECTION
My name is Sicily Makena a student at Jomo Kenyatta University undertaking Masters in Business
Administration {finance option}. As part of my course, I am required to carry out a research on a topic of
concern. I have chosen to study influence of corporate governance on the Kenya Ports Authority (KPA).
Having selected several KPA employees as participants in the research, I will require them to fill out
questionnaires. Kindly allow me to collect data from the employees at this station. This is purely an academic
study and note that all information given by you shall be treated with utmost confidentiality.
Attached is a copy of the questionnaire
Kind regards,
Sicily Makena.
Appendix II: Research Questionnaire
Introduction
My name is Sicily Makena a student at Jomo Kenyatta University undertaking Masters in Business
Administration {finance option}. As part of my course, I am required to carry out a research on a topic of
concern. I have chosen to study on influence of corporate governance on the Kenya Ports Authority (KPA) and
you have been selected as one of the participants in the study. Kindly fill in the questions that follow. This is
purely an academic study and note that all information given by you shall be treated with utmost confidentiality.
Kindly fill in the following:
SECTION 1: BACKGROUND INFORMATION
1. Name (optional)………………………………………
2. Gender
Male { } Female { }
3. What is your highest level of education?
a. Secondary { }
b. Tertiary college { }
c. University graduate { }
d. University postgraduate { }
e. Other (please specify )
4. Which is your department?
Human resource { } Finance { }
Procurement { } Operations { }
Marketing { } other specify………………………{ }..
5. Level of management
{ } top level
{ } middle level
{ } bottom level
6. Number of years in KPA
{ } Below one years
{ } One to three years
{ } Three to five years
{ } Five years and above
7. How many employees fall under your supervision?
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SECTION 2: THE VARIABLES
A. Governance structure
The table below illustrates views in regards to the governance structure in KPA Use a scale of 1 to 5 where 1 is
Strongly Disagree, 2 is Disagree, 3 is Neutral, 4 is Agree and 5 is strongly agree.
Governance Structure 1 2 3 4 5
Do you believe the structure adopted by KPA management supports good performance
All tribes are well represented for better performance in KPA
Managing Directors Tenure is well and adequately determined to better performance of
KPA
The number of times there have been MD change since 2005 is once
The board members retire after every 5 years
There are sufficient number of co directors in KPA to support its performance
8. Are there enough board members in KPA to make good decisions for the
corporation?.......................................................................
9. Does the board established add value to the performance of KPA?
Explain..............................................................................................................
10. In your view, are the current governance structures efficient in the case of KPA performance?
Explain?.............................................................................
B. Board composition
The table below illustrates views in regards board composition in KPA. Use a scale of 1 to 5 where 1 is Strongly
Disagree, 2 is Disagree, 3 is Neutral, 4 is Agree and 5 is strongly agree.
Board composition 1 2 3 4 5
Board control by outsiders is sufficient to support performance
Insiders are well represented in the board to ensure performance
Number of Port professionals in the Board are adequate to ensure performance of
KPA
Government officials in the board are controlled to ensure performance
Number of years of a member in the board supports KPA performance
Number of politicians in the board are well controlled to boost KPA performance
11. Do you think that the Board composition has well represented different communities in
Kenya? …………………………………………………
C. The CEO and chairman duties are separated or a lead director is
specified?...................................………………………………………………
Board size
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The table below illustrates views in regards board size in KPA. Use a scale of 1 to 5 where 1 is Strongly
Disagree, 2 is Disagree, 3 is Neutral, 4 is Agree and 5 is strongly agree.
Board size 1 2 3 4 5
Number of members in the board are sufficient to support performance
Number of independent in the board are sufficient to support performance
The replaced members in the board are few to reflect KPA good performance
Board members retire by rotation to support good performance of KPA
Professional members are adequate in the board to support KPA performance
Number of sacked members within the board the last three years is few to
reflect KPA good performance.
13. Does the board established add value to the performance of KPA?
Explain ………………………………………….
14. Do you think there are sufficient number of members in the KPA board to influence appropriate decision
making…………………………………
D. Compensation programs
The table below illustrates views in regards compensation programs in KPA. Use a scale of 1 to 5 where 1 is
Strongly Disagree, 2 is Disagree, 3 is Neutral, 4 is Agree and 5 is strongly agree.
Compensation programs 1 2 3 4 5
Do you agree that the current compensation programs have many positive
features?
The key values’ underlying the compensation programs supports the goals of
the employees.
Most employees in KPA are comfortable with the current compensation
systems.
15. Do you feel you that you are adequately compensated as one of the employees in
KPA?......................................................
16. Do you feel you that you are adequately compensated as one of the employees in
KPA?…………………………………
E. KPA Throughput 2005-2009
The table below illustrates views in regards performance of KPA in five years span period.
Details 2005 2006 2007 2008 2009
Container traffic
Transshipment
Total Vessel Calls
17. How many containers are cleared from this Inland Container Depot? Do you feel there is any container
traffic? Explain……………
18. What are the events or things that would make you term KPA as inefficient or efficient?
Explain…………………………………..