Performance of manufacturing and allied firms listed at the Nairobi Securities Exchange, Kenya: The role of corporate governance

The Kenyan government has implemented numerous reforms, including the inclusion of the manufacturing sector as one of the government's four major agendas for revitalizing the sector. Despite these reforms, statistics show that over the last ten years, manufacturing industries in Kenya listed on the Nairobi Securities Exchange have experienced stagnation and declining profits, slowing growth, and declining market share, necessitating the establishment and execution of effective corporate governance. Therefore, the current study investigated the effects of corporate governance on performance of manufacturing and allied firms listed at Nairobi Security Exchange, Kenya. The study specifically investigated the effects of board composition, board size, board independence and board diversity on performance of manufacturing and allied firms. Agency theory, RBV and stakeholder’s theory anchor the study. Descriptive research design was used. Stratified random sampling technique was used as a sampling technique. A self-administered semi-structured questionnaire was used to collect primary data from a population of four hundred and thirty-nine manufacturing and allied firms. Two hundred and nine corporate managers from these manufacturing companies were sampled. A pilot test of twenty-nine respondents was conducted. Collected data was coded, cleaned, and analyzed. Data analysis included the creation and interpretation of descriptive means, percentages, and standard deviations, which was presented in the form of tables, charts, and graphs. The results of regression analysis established that board composition, board size, board independence and board diversity significant influenced firm performance of manufacturing and Allied Firms listed at the Nairobi Securities Exchange, Kenya.