INFLUENCE OF CORPORATE GOVERNANCE PRACTICES ON ORGANISATION PERFORMANCE: CASE OF KENYA POWER & LIGHTING COMPANY, KENYA
Abstract
Organisation management is regarded as a fundamental necessity for running any institution, strengthening directors' performance, openness, and disclosure, giving account, risk management, internal audit, effective leadership, and sound corporate citizenship. Kenya Power & Lightning Company is one of the parastatals in Kenya where the government is the major and controlling shareholder. The organisation is charged with the role of supplying electrical power to the citizens and commercial enterprises. Despite the growing population in the country, Kenya Power is the only organisation tasked with connecting the citizens to the power grid, therefore, acting as a monopoly. The aim of this study was to examine the influence of organisation management principles employed by Kenya Power & Lightning Company. This study was guided by two theories, the famous Agency Theory and Stakeholder Theory. The study involved a population of 376 personnel comprising corporate managers, tactical managers, and subordinate personnel working at the organisation's head office. The use of stratified random sampling assured objectivity and eliminated biases in the investigation. As a result, 30% of the study population was sampled, yielding a sample size of 113 from the three categories. Questionnaires were used to collect data from the sampled respondents. To address the study questions, the acquired data was analysed using descriptive analysis. According to the study, corporate governance can explain up to 20.5% of variations in a company's organizational performance. Although not statistically significant, there was a modest and positive relationship between board structure and organizational success. Stakeholder involvement and organizational performance had a statistically meaningful, albeit moderate, link. Board transparency and organizational success had a statistically meaningful, albeit moderate, link. A parastatal, improvements in KPLC’s performance would yield immense value to the public. The study recommended KPLC to appreciate and elevate the role of board committees to enhance the efficiency of the company and create better synchronization between the board other stakeholders such as the managerial team.
Key Words: Board Structure, Stakeholder Engagement, Transparency
CITATION: Muruu, S. M., & Njoroge, J. (2023). Influence of corporate governance practices on organization performance: case of Kenya Power & Lighting Company, Kenya. The Strategic Journal of Business & Change Management, 10 (2), 351 –367.
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DOI: http://dx.doi.org/10.61426/sjbcm.v10i2.2609
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