Relationship Between Efficiency and Board Composition of Water Services Providers: a Case Study of Athi Water Services Board

Abstract

The water sector plays a vital role in the viability of different sectors of the economy however access to water is key issue in many developing countries Kenya included. Reliable and adequate access to water is critical for businesses as well as the inhabitants. The government has a role of ensuring cost effective measures that can help stretch limited water supplies, improve water quality and access. The study sought to evaluate the link between efficiency as depicted by level of non revenue and board composition. Gender diversity in boards remains relatively low despite the wave of affirmative action for gender parity. Few studies have been done in Kenya to establish the relationship between efficiency and gender diverse boards. In order to establish this, the research was designed as a case study, where this relationship was investigated. The study used 12 water services providers under AWSB to examine the nature of the relationship between efficiency and gender diversity for the period 2009 to 2012. The findings of the study were that there was a positive relationship between efficiency and the board composition. However there was a negative relationship between the revenue and gender diversity as well as a negative relationship between expenditure with the gender diversity. The sectors comparative analysis also indicated that on average firms with more female directors were more efficient depicted by a lower level of non revenue water. The study therefore recommends that companies that have more women in the board benefit, it asserts that efficiency and gender diversity are related however it does not demonstrate causation.