Ownership Structure, Corporate Governance and Corporate Performance: the Case of the Kenyan Quoted Companies,

Abstract

This study presents a final report on ownership structure, corporate governance and its impact on the corporate performance of the Kenyan quoted companies. The result utilizes cross-sectional data from forty-four publicly quoted companies out of the fifty- four listed companies for the year 2001. Our findings dispel many of the commonly held opinion on some of issues on the relationship between ownership structure and performance. The results reject the first hypothesis that implies that concentration ratio does not play a significant role in explaining performance. Also, the structure of ownership has impact on firms’ performance under EVA. The result did not support the convergence of interest hypothesis that there is correlation between managerial shareholding and firms’ performance. The present results indicate that we do not have a discernible or systematic impact of internal shareholding on performance. With the results, policy measures should be taken to stimulate the growth of collective investment vehicles in the country. The government should also practice crowding in policies as a way of uplifting corporate performance through the growth of small and medium scale enterprises. Finally, the government policies of attracting foreign investors, strengthening market ' regulatory mechanisms and liberalization of the pension industry will make the capital market more vibrant in offering value adding services to lift Kenyans out of poverty.