An Analysis Of Corporate Governance As A Strategy To Address The Performance Of Sugar Manufacturers In Kenya (A Case Study Of Mumias Sugar Company Limited)

Abstract

Currently, a talk around the planet is whether there is proper stewardship geared towards organizational performance. Any outcomes of decisions made by the leaders in those organizations are supposed to benefit environment, the stakeholders and the communities in which they operate. This therefore underscores the need to improve the use of resources, which in turn increases the effectiveness and efficiency of firms. Sugar firms use various strategies for employing existing resources optimally so that a responsible and beneficial balance can be achieved over the longer term. The recent corporate governance erosion in Mumias Sugar Company which contributes more than half sugar production in Kenya warrants this study. It is therefore, against the status of affairs that the present study was conducted to fill this knowledge. The study analyzed corporate governance as a strategy to address the performance of sugar firms in Kenya. The study target population was the 113 officers of Mumias Sugar Company. Since the sample population was manageable and readily accessible, the study used census to collect data. The primary data collection method was through administration of structured questionnaire. The collected data was analyzed using descriptive statistics and inferential statistics. Narratives were used for interpretations of the results and findings and thereafter multiple regressions was then carried to establish the relationship between the Independent Variables (IVs) and the Dependent Variable (DV). Descriptive data was analyzed with assistance of SPSS ver. 20.0 statistical tool. The study concludes that firm performance of sugar companies in Kenya is moderate and that it is influenced by corporate governance, since the indicators of corporate governance; board characteristics, top management characteristics; and stakeholders’ communication characteristics are established to predictors of firm performance of sugar companies in Kenya. The study established that board characteristics highly affects the performance of Sugar Companies, top management characteristics highly influenced the performance of sugar companies, and revealed that stakeholders’ communication characteristics highly affected performance of sugar companies in Kenya. The study recommends that the sugar companies in Kenya should address the issues of board characteristics in their firm through establishment of effective policies and strategies, establish systems and policies to audit and trail the top management performance of sugar companies to ensure transparency and accountability of the directors and the CEO and the sugar companies in Kenya should significantly review the Stakeholders’ Communication polices to ensure that the stakeholders are also informed beforehand of any happenings in their investments.