CORPORATE GOVERNANCE AND FIRM PERFORMANCE IN DEVELOPING COUNTRIES: EVIDENCE FROM EAST AFRICA

Abstract

The main purpose of this study was to examine the relationship between corporate governance and firm performance; compare the influence of corporate governance on firm performance before and after the operationalization of the EAC- Common Market in 2010 and make recommendations about corporate governance codes that enhances firm performance. We adopted a positivist paradigm in a quantitative analysis using non-probability sampling to select forty-two EAC-listed companies. Hypothesizes were developed from literature review and secondary data from academic databases and annual reports was extracted and analysed using SPSS version 23 to generate descriptive statistics, correlation, and regression output. Our findings revealed that gender diversity of the board and enterprise risk management had no significant influence on firm performance but the relationship between board independence, the board size, and firm performance was inconclusive. On the changes in corporate governance indicators before and after the operationalization of the EAC Common Market in 2010, we discovered insignificant changes nevertheless, the results from regression model fit revealed that the indicators become relatively more relevant to company financial performance after the operationalization of the EAC Common Market in 2010 than before.