The impact of corporate governance on the financial performance of community based organizations in Kibera

Abstract

This study aimed at collecting information from CBOs dealing with health implementation in Kibera. The task included determining the impact of corporate governance on the financial performance of CBO’s in Kibera and determining if corporate governance affects financial performance of CBOs in Kenya. This study employed quantitative research as the main approach to guide the study. The target population included all CBOs implementing health strategies in Kibera. The research instrument used in data collection was a questionnaire to collect data from the organizations. Data was summarized into frequencies and percentages and presented in tables and conclusions drawn. The study found out that the board size and composition, separation of ownership and control, independence of committees and financial reporting to a very great extent affect the performance of the organization. The study shows that most CBOs in Kibera face challenges in monitoring financial performance and a few face communication and coordination problems. It is concluded that financial disclosure and independence of committees positively influences financial performance of CBOs while board size negatively influences the same. However, separation of ownership and control does not have significant relationship with the financial performance of CBOs. The study recommends; board of trustees and management of the CBOs to identify corporate governance structures that will enhance accountability hence enabling them to receive donor funding. There is need for regulators and the policy makers to use the finding as reference for policy guidelines (e.g. disclosure) on management and control of such organizations to be able to formulate viable policy documents that effectively address problems faced by the community based organizations. There is need for donors to assess the capability of the community based organization in managing their funds in transparent and efficient way.