CORPORATE GOVERNANCE PRACTICES AND FINANCIAL PERFORMANCE ON DEPOSIT TAKING SACCOS IN TRANS NZOIA COUNTY, KENYA
Abstract
The main objective of the study was to examine the influence of Corporate Governance practices on SACCOs’ financial performance in Trans Nzoia County. The target population was the board members, CEOs and departmental managers in all the 5 SACCOs in Trans Nzoia County. Pre-testing of research instruments was carried out among SACCOs in Bungoma County. The researcher used census methodology to collect data. Primary data was collected using semi-structured questionnaires. Content analysis was used to analyze qualitative data and the results were presented in a narrative form. Quantitative data was then analyzed using inferential and descriptive statistics with the help of statistical software known as Statistical Package for Social Sciences version 26. The study's findings were represented using both tables and figures. The results indicate that one unit improvement in board independence will lead to 0.326 improvement in financial performance of SACCOs in Trans Nzoia County. One unit improvement in board accountability practice will lead to 21.0% improvement in financial performance of SACCOs in Trans Nzoia County. One unit improvement in audit committee will lead to 0.194 units improvement in financial performance of SACCOs in Trans Nzoia County. One unit improvement in financial disclosure will lead to 0.318 units improvement in financial performance of SACCOs in Trans Nzoia County. The study concluded that effect of Corporate Governance practices have significant effect on financial performance of SACCOs in Trans Nzoia County. The study recommended that SACCOs in Trans Nzoia County should consider increasing the independence of their boards. This can be achieved by recruiting more independent directors who bring diverse expertise and perspectives without being affiliated with the organization's management. SACCOs in Trans Nzoia County should prioritize and enhance board accountability mechanisms. This includes clearly defining roles, responsibilities, and expectations for board members regarding compliance with laws, operational oversight, and performance assessment. SACCOs in Trans Nzoia County should continue to prioritize and enhance the independence of their audit committees. This includes appointing more independent directors to the committee to strengthen oversight and reduce potential conflicts of interest.
Key words: SACCOS, Board Independence, Board Accountability, Audit Committee, Financial Disclosure
CITATION: Wafula, D. N., & Miroga, J. (2024). Corporate governance practices and financial performance on deposit taking SACCOs in Trans Nzoia County, Kenya. The Strategic Journal of Business & Change Management, 11 (4), 542 – 563. http://dx.doi.Org/10.61426/Sjbcm.v11i4.3104
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DOI: http://dx.doi.org/10.61426/sjbcm.v11i4.3104
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