INFLUENCE OF CORPORATE GOVERNANCE PRACTICES ON PERFORMANCE OF SAVINGS AND CREDIT COOPERATIVE SOCIETIES IN THE CENTRAL REGION OF KENYA
Vivian Martha Wanjiku Kibue - Masters Student, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Robert Mang’ana - Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
The goal of this research was to see how corporate governance policies affected the performance of deposit-taking SACCOs in the Central Region of Kenya. Corporate governance is commonly thought of as a framework that protects businesses against potential financial difficulties. The study's particular goals were to look at the impact of board selection, regulatory compliance, board leadership, and information transparency on deposit-taking SACCO performance in the Central Region of Kenya. A descriptive research design was used in this study. Deposit-taking SACCOs were chosen since the region is home to 61 percent of Kenya's SACCOs. The study's population included all 52 deposit-taking SACCOs in the Central Region of Kenya. A sample of 10% was selected. This generated a sample of 54 respondents. The study collected primary data gathered using a structured questionnaire administered through drop and pick later method. Both qualitative and quantitative analysis of data was done to answer the research questions of this study. The qualitative data was analyzed using content analysis and presented in prose form. For quantitative analysis, the researcher used Statistical Package for Social Sciences (SPSS Version 25) software. A multiple linear regression analysis was conducted. Tables and figures were used to summarize responses for further analysis and facilitate comparison. The study discovered that board qualities and regulatory compliance have a minor impact on deposit-taking SACCO success. The study shows that board factors, such as board size, board composition, board meetings, and board independence, have a significant impact on deposit-taking SACCO performance. The degree to which legal systems, such as state laws and statutory rules, are followed is critical in safeguarding, preventing, controlling, and lowering activities that have an impact on SACCO performance. The appointment of board members, the independence of non-executive directors, and the separation of the CEO and chairman positions all have an impact on deposit-taking SACCO performance. Information disclosure takes into account the transparency, reliance and reverence in accounting, auditing and reporting which influence the end results in organizational performance. The SACCOs realize better and higher organizational performance in terms of income, equity, assets and financial leverage due to adoption of specific tactics, corporate governance being one of them. SACCOs should form boards with the appropriate size, independent directors, and a balance of executive and non-executive directors, as well as relevant subcommittees, according to the report. The study recommends that the deposit taking SACCOs should adopt practices that enhance their compliance with the law and regulatory bodies. Deposit SACCOs should adopt board leadership approaches which embrace appropriate appointment of board members, independence of non-executive directors and separation of Separation of CEO.