CORPORATE GOVERNANCE AND PROFITABILITY OF AGRICULTURAL FIRMS LISTED AT THE NAIROBI SECURITIES EXCHANGE, KENYA
Winfred M. Kieti - PhD Fellow, Accounting and Finance Department, School of Business, Kenyatta University, Kenya
Prof Ambrose O. Jagongo (PhD) - Associate Professor, Accounting and Finance Department, Kenyatta University, Kenya
ABSTRACT
The growing dissatisfaction among most stakeholders with the need for improved value in firms in which they have invested is a phenomenon that extends beyond individual firms and becomes a global issue. Most organizations have been forced to close due to prolonged periods of declining profitability, ultimately resulting in management losing control. Listed agricultural firms at the Nairobi Securities Exchange have experienced fluctuating profitability between 2015 and 2024. This volatility was attributed to multiple factors including commodity price fluctuations, exchange rate movements, climatic variability, operational inefficiencies and government structures. While external factors are unavoidable, corporate governance remains an internal mechanism that firms can control to enhance profitability. This study's main goal was to investigate the effect of corporate governance on profitability of agricultural firms listed at the Nairobi Securities Exchange. Analysing the effects of board committees, remuneration, independence, and size on these companies' profitability, as well as examining the moderating effect of firm size in this relationship, were the specific objectives. The study was grounded on agency, stewardship, stakeholder, and resource dependence theories.