CORPORATE GOVERNANCE AND PERFORMANCE OF AGRICULTURAL STATE CORPORATIONS IN KENYA
Abstract
This study determined the influence of corporate governance mechanisms on performance in agricultural state corporations in Kenya. The study was guided by theory of employee engagement as postulated by William Kahn. The study adopted causal research design. Sampling was done using stratified proportionate random sampling and simple random sampling. Data was collected using semi-structured questionnaires. Data analysis was done using descriptive and inferential statistics. Inferential statistics such as regression and correlation analysis were used whereby correlation analysis was done using Pearson’s Product Moment to establish the relationship between independent and dependent variables and regression analysis was conducted using simple linear, Multiple linear and hierarchical regression models. Hierarchical regression was used to analyse the moderating variable. Qualitative data collected from open ended statement was analysed using content analysis and presented using narrations and verbatim. Quantitative data was presented using graphs, charts and tables. The results indicated that corporate governance mechanisms have significant positive effect on performance. This was supported by B-coefficients Disclosure β1=0.253, P=0.000; Risk management β2=0.194, P=0.000; Stakeholder engagement β3=0.306, P=0.000; Corporate social responsibility β4=0.189, P=0.001. The coefficient of determination (R2) was 0.662, P=0.000 and this shows that 66.2% of the variations in the performance can be explained by the four predictor variables. Hierarchical regression analysis moved adjusted r –square from 65.2% (unmoderated R square=0.652, P=0.000) to 79.7% (Moderated R square=0.797, P=0.000) representing a significant 14.5% change in R square before and after introduction of organizational culture as a moderator. The study concluded that organizational culture has significant moderating effect of organizational culture on the relationship between corporate governance mechanisms and performance of agricultural state corporations in Kenya. Therefore, the study recommended that the management should ensure that the EVP is aligned seamlessly with the core values and principles of the organizational culture. Further, management should embed the EVP within a values-driven organizational culture, promote and reinforce behaviors that align with the EVP, emphasizing the importance of values in day-to-day operations.
Key Words: Disclosure, Risk Management, Stakeholder Engagement, Corporate Social Responsibility
CITATION: Ondiba D. M., Miroga, J., & Juma, D. (2024). Corporate governance and performance of agricultural state corporations in Kenya. The Strategic Journal of Business & Change Management, 11 (2), 1007 – 1027. http://dx.doi.org/10.61426/sjbcm.v11i2.2966
Full Text:
PDFReferences
African Business Magazine (ABM) (2012). “Is Private Security Taking Over Africa?” ABM, November 22. Available at:http://africanbusinessmagazine.com/sector-reports/security/isprivate-security-taking-over-africa/#sthash.d7Jc3k3R.dpuf.
Ahmed, N., &Hadi, O. A. (2017). Impact of ownership structure on firm performance in the MENA Region: An empirical study. Accounting and Finance Research, 6(3), 105-115.
Barako, D. G., & Brown, A. M. (2008). Corporate social reporting and board representation: evidence from the Kenyan banking sector. Journal of Management & Governance, 12(4), 309.
Bell, E., Bryman, A., & Harley, B. (2018). Business research methods. Oxford university press.
Bosch, J. M. (2014). How do the board characteristics influence the firm performance? (Bachelor's thesis, University of Twente).
Bryman, A. (2016). Social research methods. Oxford university press.
Busso, D. (2018). Does IFRS 13 Improve the Disclosure of the Fair Value Measurement? An empirical analysis of the real estate sector in Europe. GSTF Journal on Business Review (GBR), 3(4).
Cohen, P., West, S. G., & Aiken, L. S. (2014). Applied multiple regression/correlation analysis for the behavioral sciences. Psychology Press.
Diphoorn, T. (2016). “Surveillance of the Surveillers”: Regulation of the Private Security Industry in South Africa and Kenya. African studies review, 59(2), 161-182.
Donaldson, L., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of management, 16(1), 49-64.
Field, L., Lowry, M., & Mkrtchyan, A. (2013). Are busy boards detrimental?.Journal of Financial Economics, 109(1), 63-82.
Hope, O. K., Thomas, W. B., & Vyas, D. (2013). Financial reporting quality of US private and public firms. The Accounting Review, 88(5), 1715-1742.
Ironkwe, U., &Adee, G. M. (2014). Corporate governance and financial firm’s performance in Nigeria. Journal of Exclusive Management Science, 3(8), 1-6.
Jadah, H. M., &Adzis, A. B. A. (2016). The effect of board characteristics on Iraqi banks performance. International Journal of Academic Research in Accounting, Finance and Management Sciences, 6(4), 205-214.
Jensen, M. C., &Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of financial economics, 3(4), 305-360.
Juma, L. (2013). Human Rights and Conflict Transformation in Africa. African Books Collective.
Killen, M., & Smetana, J. G. (2013). Handbook of moral development. Psychology Press.
Kim, K. H. (2013),” Deep Structures in CEO Duality-Firm Performance Linkage”, International Management Review, 9(2), pp. 11- 23.
Kirunda, S. W. (2018). Private and Public Security in Uganda. The Private Security Sector in Africa, 1.
Kline, R. B. (2015). Principles and practice of structural equation modeling. Guilford publications.
Mahmudi, B., & Nurhayati, E. (2015). The influence of board governance characteristics on intellectual capital performance (empirical study on listed banks in BEI 2008-2012). Review of Integrative Business and Economics Research, 4(1), 417.
Mahrous, S. A. (2014). The Effect of Board Characteristics on the Financial Performance of Firms: An Empirical Study on the Most Active Firms in the Egyptian Stock Exchange (Master‟s Thesis). Retrieved 26th March, 2016 from www.aast.edu/pheed/.../pdf_retreive.php? url=50415...pdf...staff pdf
Manly, B. F., & Alberto, J. A. N. (2016). Multivariate statistical methods: a primer. Chapman and Hall/CRC.
Mburu, D. M. (2019). Effect of Corporate Governance on Firm Performance: A Case of Family Owned Businesses Listed On the Nairobi Securities Exchange (Doctoral dissertation, United States International University-Africa).
Muriuki, J. W., Cheruiyot, T., & Komen, J. (2017). Influence of Corporate Governance on Organizational Performance of State Corporations in Kenya. Science Journal of Business and Management, 5(4), 136.
Musyoka, M. N. (2017). Effect of Voluntary Disclosure on Financial Performance of Firms Listed At Nairobi Securities Exchange (Doctoral dissertation, KCA University).
Pearson, F. S. (2018). The Global Spread of Arms: Political Economy of International Security. Routledge.
Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. John Wiley & Sons.
Shan, W., & An, R. (2018). Motives of Stock Option Incentive Design, Ownership, and Inefficient Investment. Sustainability, 10(10), 3484.
Siekkinen, J. (2017). Board characteristics and the value relevance of fair values. Journal of Management & Governance, 21(2), 435-471.
Tulung, J. E. (2017). Resource Availability and Firm’s International Strategy as Key Determinants of Entry Mode Choice. JurnalAplikasiManajemen, 15(1), 160-168.
Wekesa, D. M., Kiprotich, C. P., &Kwasira, J. O. S. P. H. A. T. (2013). An assessment of human resource management practices on Organizational performance in private security firms in Kenya. International Journal of Human Resource Management and Research, 3(5), 11-18.
Yosi, F., &Yuniasih, R. (2017). The effect of ownership structure, board of commissioners’ effectiveness and audit committee effectiveness on firm value: An empirical study of listed companies in the Indonesia stock exchange 2014. In Competition and Cooperation in Economics and Business (pp. 31-38). Routledge.
DOI: http://dx.doi.org/10.61426/sjbcm.v11i2.2966
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.