Board Characteristics And Financial Distress Of Listed Commercial Banks In Kenya


  • Department: Business Administration and Management
  • Project ID: BAM3482
  • Access Fee: ₦5,000
  • Pages: 104 Pages
  • Reference: YES
  • Format: Microsoft Word
  • Views: 354
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Commercial banks have pivotal role in economic development. They not only create wealth but also, the custodian of resources mobilization and allocation. Global business environment has amplified the need for effective corporate governance; this will not only maximize shareholders wealth but also minimize possibilities of financial distress. Corporate governance aids with the protection of investors’ interest against stakeholders and management exploitation. Board members have critical role in enhancing clarity on their role in company’s management through monitoring and advising chief executive officers. Successful governance is reflected in quality financial and non-financial performance. Investment confidence is dependent on financial health situation of a firm. The study thereby sought to establish the relationship between board characteristics and financial distress of listed commercial banks in Kenya. The specific objectives were: to determine the relationship between ownership structure, board structure, audit committee and independent directorship and financial distress of commercial banks listed at Nairobi Securities Exchange, Kenya.The study was anchored on agency theory, signalling hypothesis, information asymmetry theory and wrecker’s theory. Correlation research design was adopted. A Census study of 11 listed commercial was adopted. Secondary data was collected from years 2011 to 2018. Inferential analysis and descriptive statistics were used to analyse data which was presented in tables, graphs and figures. The study found a positive and significant relationship between ownership structure and financial distress. Board structure had a positive and significant relationship with financial distress. Moreover, the study established a positive and insignificant relationship between audit committee structure and financial distress.The study further found a positive and insignificant relationship between independent directorship and financial distress. Governance disclosure had a positive and significant effect on financial distress. Governance disclosure has a positive and significant moderating effect on relationship between ownership structure, board structure and financial distress. Furthermore, governance disclosurehas a positive and insignificant moderating effect on the relationship between audit committee structure and independent directorship and financial distress. Hence, the study makes several policy recommendations: the management of listed commercial banks should devise measures that are aimed at promoting health corporate governance.

  • Department: Business Administration and Management
  • Project ID: BAM3482
  • Access Fee: ₦5,000
  • Pages: 104 Pages
  • Reference: YES
  • Format: Microsoft Word
  • Views: 354
Get this Project Materials
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