| dc.description.abstract | The issue of corporate governance is still a debate across the world, with some
emphasizing its role in their firm performance whereas others underplay its role in some
other business. The purpose of the current study was to establish the influence of
corporate governance attributes on the financial performance of microfinance
institutions in Nairobi. The specific objectives of the study were to: establish the
influence of board size, board composition, chief executive characteristics, audit
committee characteristics, and the firm's ownership type on the financial performance of
Microfinance Institutions in Nairobi County. The study was guided by the stewardship
theory, agency theory, and legitimacy theories. Nairobi city County MFIs (board
members and CEOs and auditors) totaling 351 were considered for the study. Yamane
formula was used to provide a sample of 187 respondents for the study. Primary data
was collected through the drop and pick method through questionnaires, whereas
secondary data was collected from financial newsletters, published financial statements.
Data collected for the study was analyzed through descriptive analysis. Multilinear
regression was conducted to establish the nature of the relationship between independent
and dependent variables. Presentation of the results was done on tables and graphs. The
study revealed that board size and financial performance had a significant relationship;
board composition and financial performance had a significant relationship; chief
executive characteristics and financial performance had a significant relationship; audit
committee characteristics and financial performance had a significant relationship
whereas ownership type and financial performance had an insignificant. The study
concluded that board size, board composition, CEO characteristics, and audit committee
had a positive and significant influence on the financial performance of MFIs in Nairobi
County. However, ownership type did not significantly influence the financial
performance of MFIs in Nairobi. The study recommended for an appropriate number of
board members that were cos effective in decisions making, a good mix of directors of
both executive and non-executive, men and women professionals and experienced
members to ensure higher financial performance; CEOs who were independent, and well
experienced in corporate governance knowledge; an audit committee that has financial
professional skills and meets regularly to safeguard the institutions' assets and ownership
comprising people who had the best interest of the institution. | en_US |
