The role of board of directors in corporate governance at the National Housing Corporation, Kenya

Abstract

There has been dissatisfaction in the recent past with the way power is applied in corporate entities. The exercise of control over the affairs of corporate entities has been marred by irregularities and prominent weaknesses to collapses and loss of public investments. Collapse or failure of corporate entities is often associated and blamed on the board of directors. This blame comes in the form of complains of ineptitude, corruption, greed and incompetence. Although the board of directors has been depicted in theory as the heartbeat of the corporate entity, its role with regard to corporate governance remains largely unexplored. Mechanisms of appraising the role and performance of boards of directors have also not been clearly developed. This study was set out to delve into the role that the board of directors at National Housing Corporation plays towards achieving good corporate governance. Data was collected from board members, senior management and technical staff and was appropriately analyzed to arrive at useful recommendations The study found that the role of the board of directors in corporate governance is yet to be clearly understood and that rather than facilitate the smooth running of the affairs of the corporate entity, it has become an impediment. There are complains of meddling from both the board and the management alike. These challenges are attributed to the loopholes created by the system of appointing and appraising board of directors’ performance. The study recommended that appointments to the board be made meritorious and structures be put in place to clearly set out the boundaries of responsibility between the board and management. Further study should be devoted to the relevance of the board of directors in today’s corporate divide and the sources of conflict between management and the board of directors