Board Diversity and Governance Outcomes of State Corporations in Kenya

Abstract

Boards play a critical leadership role in good governance of Kenya’s state corporations, which exit by law to deliver effectual services to the citizenry. The sector has since independence undergone various reforms aimed at continuous improvement, mitigating inherent challenges and to deliver efficient service. In 2015, the Government of Kenya upscaled its governance architecture by sanctioning a governance code. Despite this endeavour, the state corporation’s ecosystem has recorded unimpressive outcomes on the corporate governance front. This study sought to establish the relationship between board diversity and governance outcomes of state corporations in Kenya. A descriptive survey design was used on a target population of 138 state corporations and a simple random sampling technique used to draw a 20% study sample, amounting to 28 state corporations. The study collected primary data using a structured questionnaire. A drop and pick method were used to administer the questionnaire to three respondents from each sampled state corporation upon consideration and application of accruing research protocols. The data collection instrument was pretested prior to the actual data collection to check reliability and validity upon which the emergent issues were corrected and instrumentation enhanced. The collected data was analysed using simple regression analysis vide SPSS version 21. The findings have been presented using tables. The study established a significant positive relationship between board diversity and inclusion and governance outcomes of state corporations in Kenya and concluded that board diversity and inclusion is a key driver of corporate governance outcomes. The study recommended that firms should mainstream diversity and inclusion in order to drive sustainable advantage in boards as a tool to effective leadership and governance. Future studies may be undertaken in the private sector for contextual comparability