Influence of Corporate Governance Practices on Financial Performance of Kenya Power and Lighting Company
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Date
2023
Authors
Ochido, Felix Omondi
Njoroge, Jane
Journal Title
Journal ISSN
Volume Title
Publisher
RJSSH
Abstract
Simply put, corporate governance is a set of regulations and norms for operating an organization effectively.
Shareholders, workers, creditors, long-term suppliers, and subcontractors are all examples of stakeholders,
and their relationships with the firm are reflected in the report. Many studies in the recent past have shown
consensus that organizations with established corporate governance systems also show strong performance.
Therefore, good corporate governance is being seen as crucial to having an effective board of directors and
improving the returns on investments. The researcher wanted to learn more about how corporate responsibility
affects the performance of state-run businesses. Since the profitability of Kenya's state-owned businesses is
directly tied to their management of their finances, the Kenya Power and Lighting Company was singled out
for special scrutiny in the areas of financial transparency, shareholder rights, equal treatment of shareholders,
disclosure, and transparency. Three theoretical frameworks— Concept of Stakeholders, Concept of Agents, and
Dynamic Capability concept— made use of it in the research. Descriptive research methods were used to
provide a thorough account of the topics of the studies. The sample for this research consisted of all 8443
workers of Kenya Power and Lighting Company, using a stratified random sample method, 368 of them were
chosen at random. Research indicated that both financial transparency and shareholder rights were favorably
related with financial success (correlation coefficients of 0.704** and 0.666**, respectively). Financial success
is significantly correlated with how well shareholders are treated (r=0.659**). An increase in transparency
was shown to have a statistically significant relationship (r=0.664**) with better financial outcomes. The Rsquared value of 0.513 implied that 51.3% of the total variance in performance at the Kenya Power and Lighting
Company can be attributed to the four predictor variables. Factors like as disclosure, financial transparency,
the prosperity of the Kenya Power and Lighting Company was shown to be influenced by the company's respect
for shareholder rights and the fair treatment of its shareholders. Research highlighted the significance of a
sizable shareholder base that cares about the company's performance. This can facilitate easier access to
guidance for company leaders, which in turn can improve the effectiveness of Kenya's state-run firms.
Description
Article
Keywords
Open Financial Reporting, Shareholder Rights, Fair Treatment, Transparency and Disclosure, Kenya Power and Lighting Company
Citation
Ochido, F. O.,& Njoroge, J. (2023). Influence of corporate governance practices on financial performanceof Kenya Powerand Lighting Company. Reviewed Journal of Social Science & Humanities, 4 (1), 315–331.