Corporate Governance Practices and Performance of Faith Based Health Facilities in Nyanza Region

Abstract

The study sought to find out the relationship between corporate governance practices and performance of faith based health facilities in Nyanza region. The objectives of the study was guided by the following corporate governance practices; board composition, size of the board, board sub-committees, CEO duality and the frequency of the meetings. The study employed a cross-sectional survey design to establish the relationship. The study found out that 93.5% of the faith-based health facilities in the Nyanza region had sub-committees, 67.7% of the facilities had a board size of 7-8 while 74.2% of the facilities had frequency of 4 This study adopted Balance scorecard developed by Kaplan and Norton to measure organizational performance. The study found out financial perspective of performance had high correlations with corporate governance practices (R=0.621) with 38% of financial performance influenced by the corporate governance practices. Internal business processes perspectives also had high correlations with corporate governance practices however both the customers’ perspectives and innovation, learning and growth perspectives had low correlations with corporate governance practices. The study therefore concluded that the corporate governance practices affected performance of the faith based health facilities although at a varied degree. The regression analysis showed that there was a positive influence of corporate governance practice on the performance of the faith based health facilities in Nyanza region. Thus the practice of good corporate governance enhances performance of faith based health facilities. The study recommended that the secretariats of the faith based health facilities should establish a clear policies on the terms of engagement of the directors, CEO and performance appraisal of the board to check on their effectiveness. The board should also be given inductions and continuous professional trainings to equip them with new technics. For further studies, the study suggests that another study be conducted to establish the corporate governance practices and performance of health sector in Kenya.