Influence of Corporate Governance on Organizational Performance of State Corporations in Kenya

Decision making failures in Kenyan Parastatal Boardrooms has more to do with independence of mind and competences as well as behaviors of directors sitting around the boardroom tables. This includes how they work together, their degree of transparency and accountability as decision-making groups and the team production culture in task performance. This study seeks to explore the influence of corporate governance on organizational performance of state corporations in Kenya. A survey design was used to arrive at the expected outcomes in this study. Out of a population of 187 State Corporation, a sample size of 125 was considered with 375 respondents. Data was collected using questionnaires. Descriptive and inferential statistics were computed using statistical package of social sciences. Linear regression model was used to determine the relationship between corporate governance and organizational performance. The study revealed that the Board Strategic Involvement, board CEO-Chair Collaboration and Board Members knowledge & skills respectively are statistically significant (P-value=0.000). This implies that the three variables together influence organization performance of state corporations and account for 68% variation on performance. Board Leadership and Board Team production Culture (together) were not statistically significant at 5% level.