Corporate Governance and Financial Performance of Selected Commercial Banks in Kenya

Q3 Economics, Econometrics and Finance

Afro-Asian Journal of Finance and Accounting Pub Date : 2023-10-19 DOI:10.53819/81018102t4198

Pale N. Christine

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Abstract

The primary purpose of this study was to determine whether or not corporate responsibility had an impact on the bottom lines of a sample of Kenyan commercial banks. The research's specific goal was to ascertain how compensation for boards was calculated, consumer protection, nonperforming loans, and risk management on the financial performance of selected Kenyan commercial banks. This research was based on the following theories: agency theory, resource dependency theory, control theory, public choice theory and bank risk management theory. The present investigation employed an expressive research strategy. The 44 Kenyan business banks that were the focus of this analysis as at December 2022. The target respondents were the chief finance officers and credit officers. This study used a census-style methodology because the quantity of participating banks was manageable. Surveys that were semi-structured with a mix of open-ended and closed-ended questions were used to gather primary data. Descriptive statistics like frequency, average, and deviation from the mean, and inductive statistics like regression and correlation analyses were used to examine the data. After that, we use tables and figures to display the results. While respondents generally accept that board remuneration and consumer protection measures have a good impact, the statistical significance differs. NPLs are found to have a negative impact on financial performance, which is consistent with current research advocating responsible lending practices. Risk management is also seen as important; however, opinions differ. The findings of the study emphasize the significance of risk management and the good impact of board compensation and consumer protection, as well as the negative impact of NPLs. Transparent board compensation schemes, strong consumer protection measures, careful NPL management, and thorough risk management methods are among the recommendations. The study recommends future research areas to further the study on the impact of corporate supremacy in financial success. Keywords: Corporate governance Board compensation, Consumer protection, Nonperforming loans, Risk management, financial performance

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肯尼亚选定商业银行的公司治理与财务绩效

本研究的主要目的是确定企业责任是否对肯尼亚商业银行样本的底线产生影响。该研究的具体目标是确定董事会薪酬是如何计算的，消费者保护，不良贷款，以及对选定的肯尼亚商业银行财务绩效的风险管理。本研究基于代理理论、资源依赖理论、控制理论、公共选择理论和银行风险管理理论。本研究采用表达性研究策略。截至2022年12月，44家肯尼亚商业银行是本分析的重点。目标受访者是首席财务官和信贷官。由于参与调查的银行数量可控，本研究采用了人口普查式的方法。调查是半结构化的，混合了开放式和封闭式问题，用于收集原始数据。使用频率、平均值和均值偏差等描述性统计以及回归和相关分析等归纳统计来检查数据。之后，我们使用表格和图表来显示结果。虽然受访者普遍认为董事会薪酬和消费者保护措施有良好的影响，但统计意义不同。不良贷款被发现对财务业绩有负面影响，这与目前倡导负责任的贷款实践的研究一致。风险管理也被视为很重要;然而，众说纷纭。研究结果强调了风险管理的重要性，董事会薪酬和消费者保护的良好影响，以及不良贷款的负面影响。这些建议包括透明的董事会薪酬计划、强有力的消费者保护措施、谨慎的不良贷款管理以及彻底的风险管理方法。本研究建议未来的研究领域，以进一步研究企业霸权对财务成功的影响。关键词:公司治理，董事会薪酬，消费者保护，不良贷款，风险管理，财务绩效

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来源期刊

Afro-Asian Journal of Finance and Accounting Economics, Econometrics and Finance-Finance

CiteScore

0.70

自引率

0.00%

发文量

期刊介绍： Finance and accounting are seen as essential components for the successful implementation of market-based development policies supporting economic liberalisation in the rapidly emerging economies in Africa, the Middle-East and Asia. AAJFA aims to foster greater discussion and research of the development of the finance and accounting disciplines in these regions. A major feature of the journal will be to emphasise the implications of this development and the effects on businesses, academics and professionals. Topics covered include: -Asset pricing, corporate finance, banking; market microstructure -Behavioural and experimental finance; law and finance -Emerging economies: finance, audit committees, corporate governance -Islamic finance, accounting and auditing -Equity analysis and valuation, venture capital and IPOs -National GAAP and IASs compliance, harmonisation and strategies -Financial measurement/disclosure, and the quality of information reported -Accountability and social/ethical/environmental measurement/reporting -Cultural, political, institutional impact on financial measurement/disclosure -Accounting practices for intellectual capital and other intangible assets -Provision of non-audit services and impairment to auditor independence -Audit quality and auditor skills; internal control/auditing -Management accounting, control and /use of key performance indicators -Accounting education and professional development, accounting history -Public sector and not-for-profit accounting