A study of corporate governance practices and challenges by co-operative societies in Nairobi (a study of selected co-operative societies in Nairobi)

Abstract

The Co-operative Movement in Africa has faced numerous operational challenges in the past decade especially due to sudden Government withdrawal from its previous extensive support to rural sector and also due to the negative effects of economic liberalization in the country. The main objectives of this study was to identify the nature of corporate governance practices adopted by cooperatives as well as identifying challenges faced by cooperatives in the implementation of these corporate governance practices highly recommended by the government. This study adopted a descriptive design where the population of interest was the entire 10,800 cooperatives in Nairobi according to cooperative directory 2008. Stratified random sampling was used to select the respondents. Primary data was collected using a questionnaire. Collected data was first edited for completeness and consistency. Statistical package for social sciences (SPSS) was used to analyze it. From the study the researcher found out that, cases of corruption, mismanagement and misappropriation of funds by elected officials were few and the organization did not receive so much political pressure from external forces to implement activities that countered the management ethics and standards in the year 2007. In addition, delay in giving loans was the major complain by the cooperative members and majority of the staff earned on average an equivalent salary as compared to other financial institutions. The researcher recommends that corporate governance practices by cooperatives in Nairobi should be maintained and improved to cover all the functions of the cooperatives since from the findings the researcher found out that its introduction led to the improvement of the running of the cooperative societies. Likewise, the management should enlighten their members on the benefits of corporate governance practices so that there won’t be any failure during its implementation