Corporate governance: the practices of the board of directors in Kenya roads board

Abstract

Good Corporate Governance is the word on the lips of most successful leaders. The world focus has turned to the management of organizations and particularly to the boards of directors. This is because, owners of organizations want to get value from their investments, the society wants services from corporations and the employees wanting higher salaries. This can only be guaranteed by appropriate utilization of resources. The board of directors is a key structure of corporate governance. This study is a case study of Kenya Roads Board (KRB). The board of directors of KRB is mandated to oversee the road network in Kenya and manages the Road Maintenance Levy Fund (RMLF). The effectiveness of an organization is measured by the corporate governance practices that it has adopted. The study seeks to determine and assess the corporate governance practices of the board of directors of KRB. Data for the study was collected from secondary and primary sources. Primary data was collected through personal interviews. Content analysis method was used to analyze the data collected. The study established that the board of directors in KRB had adopted practices of good corporate governance. The board of directors are involved in setting the mission and objectives of the organization and overall strategic planning, allocate and monitor -.. utilization of resources, have put in place internal controls, appoint and determine the remuneration of the senior managers as well as regu..larly monitor their performance, hold regular board meetings, report to stakeholders and are generally aware of the risk areas facing the organization. However succession planning for the directors and the semor managers was minimal as well as' involvement in social responsibility activities. Though some practices of good corporate governance were found in KRB there is need for a more structured mechanism of handling various issues. Disclosures and dialogue with the stakeholders needs to be enhanced and monitoring of funds released to external bodies tightened. The relationship between the management and the board of directors needs to be continuously monitored to ensure that it remained cordial to realize the objectives of the organization.