A survey of corporate governance disclosures among Kenyan firms quoted at Nairobi stock exchange

Abstract

Corporate governance is a burning issue now-a-days. In Kenya, a number of attempts have been made on part of different governmental and non-governmental institutions for ensuring better corporate governance. Considering the importance of this issue, this paper has tried to examine the actual corporate governance disclosure practices in the listed public limited companies by considering 45 disclosure items. A sample of 35 listed companies has been taken for this purpose. To facilitate the analysis, a Corporate Governance Disclosure Index (CGDI) has been computed and a number of hypotheses have been tested. The mean and standard deviation of CGDI have been found to be 74.967 and 7.305 respectively. Compared to other emerging economies it is apparent that NSE listed companies report more comprehensively and gap between the good and poor reporters is narrower. In this study, only a mild difference has been found to exist among the CGDI of various sectors. Financial sector has been found to make more intensive corporate governance disclosure than the non-financial sector. In general, companies have been found to be more active in making financial disclosures rather than nonfinancial disclosures. Multiple regression result shows that corporate governance disclosure index is significantly influenced (at 5% level of significance) by whether or not the company is in the finance sector, the size of the board of directors, and the age of the company. Local ownership, the size of the company, whether or not the company is a multinational, and size of the company are not found to have any significant impact on corporate governance disclosure.