The Influence of Board of Directors Composition on Financial Performance of Commercial Banks in Kenya

Abstract

The purpose of this study was to investigate the influence of board of directors composition on financial performance of 43 commercial banks in Kenya. The study was guided by the research objectives to establish the influence of board of directors composition on financial performance of commercial banks in Kenya. A cross sectional survey research method and the data obtained was analyzed using descriptive and inferential statistical analysis. Findings of the study revealed that board size, average tenure, ratio of female directors, occupational experience of the directors and ratio of non-executive could significantly predict only CAR, ROE and ROA. It was recommended that Banks should first engage in establishing which of the many performance measures to prioritize since composition of the board have varied significant influences on the different performance measures, only then will they be able to have an optimum board composition that would positively impact on firm financial performance.