Ownership Structure and Corporate Governance and Its Effects on Performance: A Case of Selected Banks in Kenya | Zendy

Eric E. Mang’unyi | Zendy

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Ownership Structure and Corporate Governance and Its Effects on Performance: A Case of Selected Banks in Kenya

Author(s) -

Eric E. Mang’unyi

Publication year - 2011

Publication title -

international journal of business administration

Language(s) - English

Resource type - Journals

eISSN - 1923-4015

pISSN - 1923-4007

DOI - 10.5430/ijba.v2n3p2

Subject(s) - corporate governance , business , accounting , government (linguistics) , foreign ownership , significant difference , financial system , finance , economics , foreign direct investment , linguistics , philosophy , statistics , mathematics , macroeconomics

This study explored ownership structure and corporate governance and its effects on performance of firms in Kenya with reference to banks. The study revealed that there was no significant difference between type of ownership and financial performance, and between banks ownership structure and corporate governance practices. Further results revealed that there was significant difference between corporate governance and financial performance of banks. However, foreign-owned banks had slightly better performance than domestically-owned banks. This study recommends that corporate entities should promote corporate governance to send a positive signal to potential investors. The Central Bank of Kenya (CBK) should continue enforcing and encouraging firms to adhere to good corporate governance for financial institutions for efficiency and effectiveness. Finally, regulatory agencies including the government should promote and socialise corporate governance and its relationship to firm performance across industries.

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