Effect of Corporate Governance Practices on Finanacial Performance of Selected Savings and Credit Coperative Organizations in Nairobi County

Abstract

Corporate governance is of great importance for financial performance. In Africa, Savings and Credit Cooperative Organizations (SACCOs) have been growing as a strong tool to meet financial needs. This is because, cooperatives are well placed to bring about equitable development and justice. However, SACCOs like any other business, are faced with challenges in their quest for growth and corporate governance stand as one of the main challenges facing SACCOs. Some of these SACCOs have come under spotlight for cases of mismanagement and number of them have closed and therefore if this trend is not checked, it may lead to depletion of SACCOs’ funds and collapse of more SACCOs in Kenya. This study therefore, investigated effect of corporate governance practices on financial performance of cooperative societies a case of Savings and Credit Cooperative Organizations (SACCOs) in Nairobi County. The study focused on influence of; Board size, CEO duality, Board Ownership and Board Composition. The findings of this study will hopefully be beneficial to executive members of SACCOs and other cooperative societies in improving the performance of cooperative societies and enable them to compete globally. This study applied descriptive survey design. The study focused on 38 deposit taking SACCOs in Nairobi County licensed by SASRA. The study applied simple random sampling method to select a sample. Data was collected through the questionnaire which comprised of both close ended and open ended questions. The data was coded in SPSS Vs21 through which analysis was conducted and the results of the findings were presented in tabular form to reflect both descriptive and regression analysis