dc.description.abstract | The research examined the impact of CG on financial performance of commercial banks listed at
NSE. The research was based on descriptive research design. The study targeted eleven
commercial banks with shares at the NSE. The per annum panel data was retrieved from end
year financial statements of banks the study focuses on. The secondary data used was from 2012
to 2021.The estimation model was subjected to diagnostic tests for robustness. Before parameters
are estimated, it is critical that certain assumptions are not violated so as to generate reliable
estimates. The study specially examined assumptions including normality, linearity, collinearity,
homoscedasticity, stationarity, autocorrelation among others. The sourced data on data collection
sheets was transferred to excel sheets before being exported to STATA version 15. Descriptive
statistics measures of dispersal and central tendency aided in examining the general distribution
of variables. The study employed panel correlated standard errors model as the inferential
statistics tool. The overall p-values associated with the three models used in the study showed
that CG variables (board gender diversity, board independence, board experience, board
ownership and board size) and bank size majorly affected financial performance (ROA, ROE and
P/B) of banks studied. The regression model showed that effect of board size on ROA and ROE
was direct but weak. However, board size inversely and weakly affected P/B. Further, board
gender diversity inversely affected performance measured by ROA, ROE and P/B. However,
only board gender diversity had a strong effect on ROA. Board independence strongly and
directly affected financial performance (ROA, ROE and P/B) of the banks studied. Board
experience had a direct but weak effect on financial performance. Further, there was a direct and
major impact of board ownership on financial performance (ROA and ROE). However, the
effect of board ownership on P/B was inverse and statistically significant. Finally, the results
revealed a direct impact of bank size on financial performance (ROA and ROE). However, bank
size effect on ROE was weak. Further, bank size impact on P/B was inverse and weak. The
research suggests to shareholders and directors of listed commercial banks having smaller board
sizes to increase the number of directors in their boards. The shareholders and directors of listed
commercial banks to ensure that they have the right gender diversity in their boards.
Shareholders and directors of listed commercial banks to have more independent and nonexecutive
directors in their boards. The study also suggests to shareholders and directors of listed
commercial banks to allow their executive directors especially the CEO to serve more time on
the boards. Further, shareholders and directors of listed commercial banks in Kenya to encourage
directors especially the executive directors to acquire shares of the banks. Finally, shareholders
and directors of the banks studied to ensure they have adequate assets to enable them exploit
emerging investment opportunities. | en_US |