The Politics of revenue Allocation and Resource Control in Kenya: Implications for County Governments stability

Abstract

Purpose - the purpose of the paper is to establish the existence of ERM components in the integrated financial statements and further establish the relationship between ERM and firm performance. Design/Methodology/Approach- The study adopted descriptive research design and considered the entire population of the seventeen financial firms listed at the NSE for a period of two years, 2017 and 2018. The study used secondary data. The data was analyzed using descriptive statistics and Pearson‟s correlation analysis. Findings- The study findings revealed that whereas most firms adopted and disclosed the ERM practices in their annual integrated reports, there was no significant correlation between ERM and firm performance among financial firms listed at NSE. But the general understanding was that ERM consists of risk governance, which is a set of mechanisms that deals with the agency problem of risk management and risk aggregation, which is a set of mechanisms that deals with the information problem of risk management. Research limitations/implication- The study thus recommends that the management of the financial firms listed at the NSE should allocate very minimal resources in ERM implementation to ensure that they are able to handle both agency and information problems as required by the regulators but not with a view of enhancing firm performance.