Corporate Governance Practices in Developing Countries: The Case for Kenya

Mulili, Benjamin Mwanzia; Wong, Peter S.P.

doi:10.5430/ijba.v2n1p14

Cited by 66 publications

(52 citation statements)

References 50 publications

(36 reference statements)

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“…The Kenyan codes borrowed from the Hong Kong, Singapore, and Malaysian Codes of Governance, which are themselves replications of the United Kingdom's Combined Code (Mulili & Wong, 2010). The collapse of Nyaga Stock Brokers and allegations that the firm was illegally making transactions on behalf of their clients despite the fact that they had not been given instructions led to the loss of millions.…”

Section: Introductionmentioning

confidence: 99%

Relationship between Board Remuneration and Financial Performance in the Kenyan Financial Services Industry

Ruparelia¹,

Njuguna²

2016

International Journal of Financial Research

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Board remuneration has attracted considerable interest amongst financial analysts and scholars as it is seen to be a deterrent to financial scandals that have rocked corporates in the 21 st Century. This study sought to determine the effect of board remuneration on financial performance, focussing on commercial banks, insurance companies and investment companies listed at the Nairobi Securities Exchange from 2003 to 2013. Grounding the study on the agency theory, the study postulated that board remuneration will positively influence financial performance. Secondary data was obtained from audited financial statements for the 11 years ending 2013. Board remuneration was measured by director annual fees, while financial performance was measured using the proxies; return on assets (ROA), return on equity (ROE), dividend yield (DY), and earnings per share (EPS). A linear regression model was used on pooled cross-sectional time-series data to draw the inferences of the study. The results disclose significant variations in the level of board remuneration across the companies and a significant relationship between board remuneration and DY, but not ROA, ROE, and EPS. When disaggregated to financial market segments, the results confirmed a statistically significant relationship between board remuneration and with dividend yield in the banking sector. The same was not reported for ROA, ROE, and EPS. In the insurance segment, there was a statistical significance between board remuneration and ROA only, while in the investment sector, there was no significant relationship between board remuneration and financial performance measures.

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Section: Introductionmentioning

confidence: 99%

Relationship between Board Remuneration and Financial Performance in the Kenyan Financial Services Industry

Ruparelia¹,

Njuguna²

2016

International Journal of Financial Research

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“…The financial scandals have drawn the attention of regulators and policymakers, especially in the developing markets (S&P, 2008;Mulili and Wong, 2011;Feleaga, N. and al., 2011;Shanikat andAbbadi, 2011 andErkens andHung, 2012). Disclosure and transparency are considered as an important component and one of the main indicators of an effective corporate governance structure.…”

mentioning

confidence: 99%

Corporate Governance and Disclosure Quality: Taxonomy of Tunisian Listed Firms Using the Decision Tree Method based Approach

Khiari¹

2013

emaj

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This study aims to establish a typology of Tunisian listed firms according to their corporate governance characteristics and disclosure quality. The paper uses disclosed scores to examine corporate governance practices of Tunisian listed firms. A content analysis of 46 Tunisian listed firms from 2001 to 2010 has been carried out and a disclosure index developed to determine the level of disclosure of the companies. The disclosure quality is appreciated through the quantity and also through the nature (type) of information disclosed. Applying the decision tree method, the obtained Tree diagrams provide ways to know the characteristics of a particular firm regardless of its level of disclosure. Obtained results show that the characteristics of corporate governance to achieve good quality of disclosure are not unique for all firms. These structures are not necessarily all of the recommendations of best practices, but converge towards the best combination. Indeed, in practice, there are companies which have a good quality of disclosure but are not well governed. However, we hope that by improving their governance system their level of disclosure may be better. These findings show, in a general way, a convergence towards the standards of corporate governance with a few exceptions related to the specificity of Tunisian listed firms and show the need for the adoption of a code for each context. These findings shed the light on corporate governance features that enhance incentives for good disclosure. It allows identifying, for each firm and in any date, corporate governance determinants of disclosure quality. More specifially, and all being equal,obtained tree makes a rule of decision for the company to know the level of disclosure based on certain characteristics of the governance strategy adopted by the latter.

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“…Scholars normally describe the evolution of the corporate governance in terms of changes in relationship between ownership and control (Chandler, 1977;Fligstein, 1990;Bhagat & Bolton, 2008;Ang, Cole & Wuh lin, 2000). The idea of corporate governance was quickly adopted in different parts of the world but with some major variations because circumstances vary from country to country (Mulili & Wong, 2011). In this context, two main approaches of corporate governance can be identified as Agency theory and Stewardship theory.…”

Section: Ownership Structure In the Corporate Governance Practicesmentioning

confidence: 99%

Corporate Governance Practices and Capital Structure: A Case in Sri Lanka

Achchuthan¹,

Kajananthan²,

Nadarajah³

2013

IJBM

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Corporate Governance Practices in Developing Countries: The Case for Kenya

Cited by 66 publications

References 50 publications

Relationship between Board Remuneration and Financial Performance in the Kenyan Financial Services Industry

Relationship between Board Remuneration and Financial Performance in the Kenyan Financial Services Industry

Corporate Governance and Disclosure Quality: Taxonomy of Tunisian Listed Firms Using the Decision Tree Method based Approach

Corporate Governance Practices and Capital Structure: A Case in Sri Lanka

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