Impact of corporate governance on bank performance:
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Date
2011-03
Authors
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Journal ISSN
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Publisher
Kampala International University, College of Economics and Management
Abstract
This survey was conducted between the months of February and May 2009. 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 banks in Kenya. 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.
Description
A research report submitted to the school of business and management in partial fulfillment of the requirements for the award of a Bachelor’s Degree in business administration of Kampala International University
Keywords
Corporate governance, Bank performance, Kenya