Impact of corporate governance on the performance of Comercial Banks in Kenya:

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Kampala International University, College of Economics and Management
This survey was conducted between the months of February and June 2010. It is set to examine the extent of the application of Corporate Governance practices in the banking sector in Kenya. The survey was founded on the premises that Corporate Governance is a vital ingredient in maintenance of a dynamic balance between the need for order and equality in society. Corporate Governance is an integral part of the banking sector, considering the role played by the banking and financial institutions. The survey also sought to establish if there is a relationship between the actual Corporate Governance practiced in the banking sector and what the stakeholders expect. The design used in this research was a survey of the descriptive kind. This design was used to acquire a lot of information through description and was useful for identifying variables. Primary data in this survey was collected using semi-structured questionnaires and was administered by face to face interviews. The quota size of the study was respondents drawn from commercial bank in Kenya (Machakos Branch). Analysis and results are shown through the use of percentages, mean scores, standard deviations, and tables are then used to present the data. Most of Corporate Governance practices are undertaken and implemented by the Board of Directors and the top management. The level of involvement of the lower management and subordinates is very low thus raising various issues such as; How qualified is the Board of Directors?, How informed are the shareholders on matters of Corporate Governance?, and lastly how do you determine the extent of the application of Corporate Governance practices in the banking sector. This survey shows that it is important for the Board of Directors and the top management to be highly qualified as this improves their performance and effectiveness thus improving the firm's performance. The survey also shows that banks should improve their application of Corporate Governance practices so as to bridge the gap between what is actually practiced in terms of Corporate Governance and what the stakeholders of the bank expect to happen.
Research project submitted to the school of business and management in partial fulfillment of the requirements for the award of Bachelor's Degree in business administration of Kampala International University
Corporate governance, Performance, Comercial Banks, Kenya