CORPORATE GOVERNANCE AND PERFORMANCE OF SAVINGS AND CREDIT COOPERATIVE SOCIETIES IN KISII COUNTY, KENYA
Ignatius Mageto Kenani - Masters of Business Administration (Strategic Management), Kenyatta University, Kenya
Shadrack Bett - Department of Business Administration, Kenyatta University, Kenya
ABSTRACT
Saving and Credit Cooperative Societies sector is becoming increasingly important in Kenya. This sector is a key player in the economy, controlling about 43 per cent of Kenya’s gross domestic product (GDP). The general objective of the study was to establish the influence of corporate governance on performance of SACCOs in Kenya. The specific objectives of the study was the influence of board composition, size of the board, board members qualification and gender balance of the board members on the performance of SACCOs in Kenya. The study was anchored on two theories which included agency theory and stakeholders’ theory. The study made use of a descriptive research design. The target population for the study were 30 respondents from the 3 SACCOs offices in Kisii. A census was taken since the population was small. The researcher used a semi-structured questionnaires administered to each member of the sample population. The researcher carried out a pilot study to pretest and validate the questionnaire. Quantitative data collected was analyzed by the use of descriptive and inferential statistics using SPSS. The analysed data was presented in graphs, frequencies, charts and tables for interpretation and to enable draw conclusions and recommendations thereof. The study established that Board composition (β=0.348, p=0.000; M=3.71) had a positive and significant effect on performance of selected SACCOs. Board size (β=0.520, p=0.017; M=3.60) had a positive and significant effect on performance of selected SACCOs. Board members’ educational qualifications (β=0.444, p=0.002; M=3.69) had positive and significant effect on performance of selected SACCOs. Gender balance (β=0.419, p=0.001; M=3.55) had positive and significant effect on performance of selected SACCOs. The study concludes that board composition had a positive and significance influence on performance of the selected SACCOs. The board size had a positive and significant influence on performance of the selected SACCOs. The board members educational qualification had positive and significant effect on performance of selected SACCOs. The gender balance had a positive and significant influence on performance of selected SACCOs. The study recommends that the shareholders and members of all selected SACCOs should critically evaluate their board composition by ensuring sufficient number of non-executive directors. The shareholders and members of all the selected SACCOs should establish sizeable boards so that cannot easily be manipulated by the management team. The members who are owners of the selected SACCOs need to hire directors with higher levels of intellectual abilities for better performance. All members and shareholders of the studied selected SACCOs need to significantly improve on gender diversity in the boards by ensuring that they are gender balanced.
