An Investigation of Corporate Governance Practices in Saccos in Nyeri District

Abstract

It is acknowledged that corporate governance is an important and necessary ingredient in the financial sustainability and economic development of a co-operative society. Due to constraints of time, appropriate managerial skills and wide shareholder dispersion shareholders engage agents, directors and managers, to direct and control their enterprises. The resulting separation of ownership and control generates conflict of interest between the owners and agents hired to run the firms. Corporate governance comes in to reduce this conflict. It is therefore imperative for SACCOS to have corporate governance practices to solve this conflict. The general objective of this study was to establish the nature of corporate governance practices in SACCOS. The significance of the study is to provide a better understanding of corporate governance practices. It is to provide a body of knowledge to the academic community for further research into the area of corporate governance, to shareholders to understand and demand for good and timely corporate governance practices. For policy makers, Ministry of Co-operatives, formulation of policies and effective implementation of corporate governance practices.The Ministry of Co-operative data base has over 68 registered SACCOS in Nyeri district. However, only 36 of them are active. The study targeted 36 managers of SACCOS to investigate corporate governance practices. The study made use of descriptive research design in its research methodology. It captured respondents from 36 SACCOS in Nyeri District to whom a questionnaire was prepared and distributed. Data was analyzed by use of frequencies and percentages and presented using tables and bar graphs.The research findings point out to weaknesses in certain aspects of corporate governance practices. SACCOS should embrace these aspects of corporate governance that include accountability and responsibility, efficiency and effectiveness, probity and integrity in the conduct of business and transparency. This translates into better performance in terms of turnover and payment of dividends or interest to members.