Effects of Board Diversity on Performance of Non-governmental Organisations in Nairobi County Kenya

Abstract

The purpose of the study was to contribute to the NGO governance literature and also to provide NGOs' management and senior staff with evidence necessary for them to evaluate the effectiveness of their board composition. Using data from the NGOs located in Nairobi County in Kenya, the study measured the effects of board diversity on performance. It focused on the board diversity attributes of age, occupational and professional networks diversities. The overall objective of the study shall be to determine the effect of board diversity on performance within non-governmental organizations in Nairobi County in Kenya. The specific objectives were; to establish effect of age diversity of board members on NGOs performance; the effect of occupational diversity of board members on NGOs performance and to find out the effect of professional networks diversity of board members on NGOs performance; The scope of the study covered both local and international NGOs in Nairobi County. The Directory of Development Organizations identified that 702 NGOs are registered in Nairobi, Kenya. This body of organizations constituted the population of the study. This paper investigated three independent variables (age diversity, occupational diversity and professional networks diversity) against the dependent variable – performance. Performance was reviewed from a resource dependency theory perspective.The study employed a descriptive research design and adopted questionnaires as its data collection tool. Primary data was collected using questionnaires sent to a sample of 84 respondents. The study made use of descriptive, correlation and regression statistics in analyzing the data that was collected with the aid of Statistical Package for Social Sciences (SPSS20.0). The study variables (age diversity, occupational diversity and professional networks diversity) contributed to the improved organizational performance of the NGOs from the study. Out of the 84 issued questionnaires, 63 questionnaires representing 75% of the total questionnaires distributed were returned fully completed. Out of the 63 respondents, majority (46.9%) were aged between 31 – 42 years, 28.1% were aged between 43 – 55 years and 18.8% were aged 56 years and above. The respondents strongly agreed that the board of their organizations were composed of members with varied networks/connections with a mean of 3.1563 and a standard deviation of 1.13903. Respondents reported that the age diversity of the board members in their organizations was of low extent as shown by a mean of 2.8438 for a low extent and a standard deviation of 0.51490. The respondents agreed to a very great extent indicating that the boards of the studied organizations are composed of members from varied occupations with a mean of 4.4063 with a standard deviation of 0.49899. The correlation results indicated that occupational diversity was the strongest of the 3 variables with a positive correlation of 0.684 with a significance value of 0.015. Professional networks diversity was positively correlated at .578 with a significance value of .001, whereas, age diversity was positively correlated to organization performance at .586 and a significance value of .000. The estimates of the regression coefficients, t-statistics and the p-values for the relationship between age diversity, occupational diversity and professional network diversity against organizational performance resulted in the equation below which shows that all the independent variables had a positive relationship with organizational performance; Y1 = 3.604 + 4.058 X1 + 4.078 X2 + 2.780 X3 In conclusion, regression and correlation analysis showed that indeed there was a relationship between the three variables against the dependent variable, organizational performance. The study recommends the need for the top management of the non-governmental organizations to ensure presence of different professionals within their boards. Board members with diversified networks would facilitate growth of the organization. Also, the board of management in any organization should comprise of individuals of diversified ages and there is need for the non-governmental organizations to have different occupations represented in their boards of management.