EFFECT OF CORPORATE GOVERNANCE ON FIRM PERFORMANCE: A CASE STUDY OF MANUFACTURING FIRMS IN ELDORET CITY, KENYA

Abstract: This study investigated the effect of corporate governance on the performance of manufacturing firms in Eldoret town, Kenya. Three objectives were set to achieve this aim, which included the impact of fairness practices, transparency, and accountability on firm performance. The study was based on agency theory. The target population for this study was 110 employees of selected manufacturing firms in Eldoret town. Among the 110, 30% were considered manageable and appropriate for the study (Patton 2012). This means that the participants in this study were 33 respondents. Structured questionnaires were administered to the respondents. Data collected was decoded and entries made into statistical package for Social Science (SPSS version 26). Descriptive statistics such as frequencies and percentages was used to analyze primary data. The research ensured that ethical standards were adhered to. The study found that implementing fairness practices positively influences firm performance by creating satisfied and loyal workers, enhancing productivity, and contributing to financial success and competitive advantage. Additionally, transparency positively impacts decision-making, accountability, integrity, financial performance, and reputation. Accountability minimizes financial losses, improves operational efficiency and effectiveness, enables quick recovery from potential risks and disruptions, and identifies and realizes opportunities while mitigating potential threats. Based on the findings, the study recommends that manufacturing firms operating in Eldoret town should prioritize the implementation of fairness practices, transparency, and accountability strategies. Moreover, the study highlights the need for manufacturing firms to establish and maintain a culture of ethics, integrity, and accountability in their operations. Employee training and development should also be prioritized to enhance their skills and knowledge, thus contributing to operational efficiency and effectiveness. Finally, further research is recommended to evaluate the relationship between corporate governance and firm performance in other sectors and regions. Keywords: Corporate Governance; Firm Performance; Fairness Practices; Transparency; Risk Management. Title: EFFECT OF CORPORATE GOVERNANCE ON FIRM PERFORMANCE: A CASE STUDY OF MANUFACTURING FIRMS IN ELDORET CITY, KENYA Author: Irene Cherono International Journal of Recent Research in Commerce Economics and Management (IJRRCEM) ISSN 2349-7807 Vol. 12, Issue 4, October 2025 - December 2025 Page No: 127-146 Paper Publications Website: www.paperpublications.org Published Date: 18-December-2025 DOI: https://doi.org/10.5281/zenodo.17974075 Paper Download Link (Source) https://www.paperpublications.org/upload/book/EFFECT%20OF%20CORPORATE%20GOVERNANCE-18122025-3.pdf