Corporate Governance and Performance of Firm: Evidence from Firms Listed at the Nairobi Securities Exchange, Kenya

The performance of firms listed on the Nairobi Securities Exchange (NSE) remains important to economic growth, investor confidence, and capital market stability. However, empirical findings on the relationship between corporate governance and firm performance remain inconclusive. This study examined the effect of corporate governance on the performance of firms listed on the NSE. Guided by a positivist research philosophy and descriptive-correlational research design, the study analysed panel secondary data from 63 firms with complete data covering 2014-2025, obtained from published annual reports and reputable financial databases. Firm performance was measured using Tobin’s Q, while corporate governance was assessed using board size and board independence. Firm size, financial leverage, and firm age were included as control variables. Panel regression techniques, including pooled ordinary least squares, random effects, and fixed-effects models, were estimated, with the Hausman specification test guiding model selection. The findings revealed that corporate governance had a positive and statistically significant effect on firm performance. The study recommends that listed firms strengthen corporate governance mechanisms to enhance performance, while policymakers and regulators promote effective oversight and accountability. The study contributes empirical evidence to the corporate governance and firm performance literature in the context of the Kenyan capital market. Keywords: Corporate Governance, Firm Performance, Board Size, Board Independence, Tobin’s Q, Nairobi Securities Exchange.