Do Board Processes Affect Firm Performance of State Owned Sugar Companies in Kenya? Exploring the Role of Use of Knowledge
Journal Title: International Journal of Finance Accounting and Economics - Year 2018, Vol 1, Issue 3
Abstract
Firms with strong financial performance are able to survive in the dynamic business environment. Financial stability of firms enables them to compete globally. Corporate governance is plays a significant role on the financial stability of firms. Thus, state owned Sugar Companies in Kenya to financially stable in order for the firms to beat competition from both private firms and international inflow of sugar produce need effective boards. Therefore, this study looked at the effect of use of knowledge and skills on financial performance of state owned sugar companies in Kenya. The study was guided by Resource dependence theory. The study employed a descriptive survey design that used both quantitative and qualitative approach. The target population was all the 38 board members of state owned sugar companies in Kenya. The study used both primary and secondary data. The primary data was collected using questionnaires while secondary data was collected using the data collection schedule. Data was analyzed using both descriptive and inferential statistics. Descriptive statistics included frequencies, mean, variances and standard deviation while inferential statistics included Pearson’s product moment of correlation and multiple regression analysis. Tables and figures were used to present the analysis output. Inferential statistical regression and correlation was done to establish the effect of board governance processes on financial performance of state owned sugar companies in Kenya. The findings of the study established that use of knowledge and skills positively and significantly affect financial performance (β=.280; p<0.05). The results of the study is of great significance to policy making and practice since it will help to develop polices for the firms to use to enhance corporate governance and therefore financial performance. The study will also be of help in theory and literature by providing updated empirical literature regarding board processes from the developing countries perspective on sugar industry in particular. Lastly, the study will form a basis for further studies on corporate governance more so on board processes in future.
Authors and Affiliations
Peter Simiyu, Mwengei K. B. Ombaba
Keywords
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