Corporate Governance Attributes and Sustainability of Selected Commercial State Corporations in Kenya

Abstract

The sustainability of an organization means a lot, for it guarantees social responsibility, financial savings, preservation of resources, reduction of waste, and environmental protection. Kenya's commercial State Corporations face instances of mismanagement, financial improprieties, and inadequate disclosure and have expressed concerns regarding the sustainability and efficacy of these institutions. Specifically, this investigation sought to address these issues by examining the link between corporate governance characteristics and the viability of commercial state corporations in Kenya. The objectives were to evaluate the effect of board members' occupational expertise, board committee meetings, board tenure and board size on the sustainability of commercial state corporations in Kenya. The research can be pegged on 5 major theories, which encompass the Triple Bottom Line Model, Agency Theory, Stakeholders Theory, and Resource Dependence Theory. The Explanatory research design and research design were used in the research. Panel regression analysis was the chosen empirical model, considering the panel data nature of the research. The audited financial reports of the five firms served as the source of secondary data using a data collection schedule guide. Census was utilized because the target population of five commercial state corporations was below the central limit theorem threshold of the normal population. Diagnostic tests for the study were multicollinearity, normality, stationarity, heteroscedasticity, and the Hausman specification test, which were conducted to ensure the sturdiness of the results. Data was analyzed using descriptive and inferential statistics. Descriptive analysis involves means and standard deviations, while inferential analysis utilizes panel regression analysis. Finally, the data analysis output was presented using tables. The study further concluded that the coefficient for board committee meetings was not significant, suggesting that meeting frequency does not significantly affect sustainability. Board tenure demonstrated a significant positive impact on sustainability, while board size also showed a significant positive effect. In an increasingly dynamic business environment, commercial state corporations should embrace innovation and adaptation to remain resilient and sustainable. This may involve leveraging emerging technologies, exploring new business models, and anticipating and responding to evolving market trends and regulatory requirements. Boards should encourage a culture of innovation and agility to drive long-term value creation and competitiveness.