Board Performance Measurement Practices and Performance of Deposit Taking Savings and Credit Co-operative Societies in Mombasa County

Abstract

Performance of the board of directors of organizations has been of great concern in the business world today as we have lately had instances of corporate failures and company closures due to the lack of mechanisms to check on the activities and performance of BOD whose role is to oversee and maximize investors‟ resources. SACCOs have in the recent past been faced with governance issues that have led to misappropriation of funds and even collapse. Therefore, due to greater need for accountability by shareholders, government entities and general public, the management boards have to evaluate their performance so that it aligns with the organizations performance in enhancing profitability, membership growth, asset and investment increase. Several studies have been conducted to show the impact of performance measurement system on profitability of SACCOs, none has specifically shown how the board performance measurement practices impact on the financial performance of SACCOs in Kenya. A descriptive survey study was conducted to gain empirical data to help fill the existing gap. The study consisted of a census of 7 managing directors of deposit taking SACCOs in Mombasa County, Kenya. Data was collected through structured questionnaires. Data obtained were edited, coded and analyzed using descriptive statistics in the form of frequency, percentages, mean and standard deviation with the aid of statistical package for social sciences (SPSS) version 20 computer software. The inferential relationship was imputed using the Pearson‟s regression analysis. The findings showed that deposit taking organizations have adopted some of the performance measurement practices to appreciable levels. It has been seen that these practices have had a positive impact on the financial performance of the SACCOs. For example there has been a positive increase in the net surplus and assets of the organizations. It is therefore recommended that the Board of Directors reviewing their policies to include inculcation of these practices in their periodic performance this will enhance their individual responsibility and also as the management board. Similarly, this will enhance the level of transparency and accountability among BOD of SACCOs.