A survey of corporate governance practices in the motor vehicle industry in Kenya

Abstract

Corporate governance issues are recerving an increasing amount of attention. There are lots of unexplored corporate issues facing many organizations in modern day. It is therefore becoming apparent that these issue~ relating to business decisions cannot be safely ignored.

Most of the corporate governance dilemmas are set in corporate business environments where decision-makers are forced to make governance decisions as stakeholders of the corporate organization. Many of these issues are complex with apparently conflicting roles on the part of the professional, manager or executive.

Many of these executives have little or no formal training regarding corporate governance and yet they preside over organizations with-a huge potential for embroiling these governance issues.

This study had two primary objectives:

1. To identify the corporate governance practices m the motor vehicle industry in Kenya. 2. To investigate the challenges that these firms are faced with in their effort

to implement these policies.

To facilitate this study, a list of 18 registered motor vehicle companies was obtained from the Kenya Motor Industry Association. Only 13 respondents agreed to participate in the study. Of those who did not respond, one said that the information would only be available from their head office abroad. The others said that their organization's policies do not. allow them to provide the information required. A self-administered questionnaire was delivered to senior executives in these companies. There were cross tabulations, use of percentages,

frequencies, tables, bar charts and pie charts to develop data sets and for analysis.

The results show that there is generally a high level of awareness about corporate governance issues among the motor industry players in Kenya. The results also show that a large number of the firms have taken deliberate steps to implement these policies amid tough challenges from external factors.

These results should however be interpreted against the limitations of the study, specifically the sample population and the kind of industry targeted by this research.

However, the findings of the study demonstrate that there are senous challenges that cannot be safely ignored, not only in the motor industry but perhaps in other sectors as well.