Corporate Governance Practices and Performance of Imarisha Sacco in Bomet County Kenya

Abstract

The problem in the Savings and Credit Cooperative Organisations industry, particularly in the teaching industry in Bomet County, is the presence of challenges related to corporate governance and organizational performance. There are issues with accountability, transparency, and risk management practices. Additionally, low levels of financial literacy among members, limited access to finance, and inadequate technology and systems further contribute to the performance-related challenges faced by these Savings and Credit Cooperative Organisations. The study was on the effect of Corporate Governance practices on the performance of Imarisha Savings and Credit Cooperative Organisation in Bomet County. The purpose of this study was to investigate how board competence, legislation, roles and responsibilities and internal controls affects performance Imarisha Savings and Credit Cooperative Organisation. The literature review focused on various theories which include core competence model, regulatory capture theory, legalistic theory, attribution theory and the balanced scorecard theory. The study design adopted was descriptive in nature considering a total population of 65 senior management, middle management, and support staff of which a complete census will be considered. Stratified sampling was used since the population was already broken down into the respective categories. Data was gathered using questionnaire and it was tested for validity and reliability. Content validity was tested with a content validity index threshold of 0.8 or higher. Reliability was tested with a Cronbach's alpha threshold of 0.70 or higher. Data was analysed using both descriptive and inferential statistics. Findings revealed that board competence, legislation, roles and responsibilities, and internal controls had a positive and significant effect on performance, that is, β= 0.469, p < 0.05), β=0.022, p < 0.05, β=0.404, p < 0.05) and β=0.045, p < 0.05 respectively. The study concluded that board competence, legislation, roles and responsibilities and internal controls improve performance. The study recommended that board members should continue to have strategic thinking skills and front the vision of the organization. Imarisha SACCO should have adequate internal policies that help to govern SACCO activities. Duties of board members at the organization should continue being properly described. The oversight committees should continue to meet regularly to oversight SACCO activities. The study recommended that further studies should be conducted on effect of corporate governance practices on performance of Imarisha SACCO in Bomet County. Indicators of corporate governance practices adopted in the study are board competence, legislation, roles and responsibilities and internal controls. The study recommends a similar study to be conducted on the subject matter but should be conducted on SACCOs’ in other Counties in Kenya.