Influence of Corporate Governance Compliance Programs and Performance of State Corporations in Kenya: The Case of National Social Security Fund (Nssf)

Abstract

State corporations are reluctant to provide concrete incentives for implementation of corporate compliance programmes. Currently, compliance is achieved by hiring expensive auditors who typically use a heuristic approach to select and investigate audit trails to show evidence about compliance. In addition to the impact on the organization’s budget, compliance checking with this approach incurs a large overhead in terms of time consumed to check for compliance. The objectives of the study were to determine the influence of risk management processes, internal audit and controls processes, employees’ education on compliance and communication, leadership and oversight on performance of state firms in African nation. The study was anchored on agency theory, neutral theory and conjointly the institutional theory. The study adopted a descriptive analysis technique. The target population of this study was 142 management workers operating in National social insurance Fund (NSSF). The study further focused on the best, middle and low-level management staffs directly handling the day to day management of the National social insurance Fund (NSSF) operations. The study used stratified sampling technique in arising with a sample size of 104 respondents’ victimization Nassiuma (2012) formula. From each stratum, simple random sampling was used to opt for the respondents for the questionnaires. The primary data was collected using questionnaires which were pretested before administration. The quantitative data throughout this analysis was analyzed by descriptive statistics using SPSS. version twenty-one. Content analysis was used in analysis of qualitative data and results given in prose form. To bring out the quantitative meaning of the data, relationships and predictions among variables were determined using correlations and regression techniques. Data was presented using frequency tables. The study found that risk management processes, employees’ education on compliance and communication, internal audit and controls processes as well as leadership and oversight greatly affect the state corporation’s performance. The study concluded that leadership and oversight had the greatest influence on the performance of state corporations in Kenya followed by internal audit and controls processes then employees’ education or training and communication while risk management processes had the least effect on the performance of state corporations in Kenya. The study recommends that risk management processes strategies employed by state corporations should support strong corporate governance, that state corporations should adopt the strategic training and development approach with its key principles of long term, and organization wide view instead of the current tactical approach and that risk based internal audit should be enhanced so as to improve performance in state corporations in Kenya.