The Relationship Between Corporate Governance and Ownership Structures of Firms Listed at the Nairobi Stock Exchange

Abstract

Corporate governance structures can be defined as the systems or mechanisms designed to monitor managers and improve corporate transparency (Tsui and Gui, 2000). Typically corporate governance structures adopted by firms experiencing declining performance results in changes in; board meeting frequency (Klapper and Love, 2003); board composition (McCord, 2002) insider share ownership (Morck, Shleifer, and Vishny, 1998); and executive compensation (Monks and Minow, 2004). Board meeting frequency potentially carries important governance implication as it is less costly for a firm to adjust the frequency of its board meeting to attain better governance of the firm, than to change the composition of its board or ownership structures. For the purposes of this study, the researcher will apply a descriptive research design. A descriptive study is concerned with determining the frequency with which something occurs or the relationship between variables. Primary data will be collected from one head of the various departments in the 52 firms listed at NSE. The respondents will be selected from various departments such corporate strategy, human resources, regulatory and business development, sales and marketing department. In order to establish the relationship between corporate governance and ownership structure for firms listed at NSE, self-administered drop and pick questionnaires will be distributed among thirty sampled employees currently employed by the listed firms head office in Nairobi in Kenya. Quantitative data collected will be analyzed by the use of descriptive statistics using SPSS to do a regression analysis and presented through percentages, means, standard deviations and frequencies. The information will be displayed by use of bar charts, graphs and pie charts and in prose-form.