BOARD STRUCTURE AND PERFORMANCE OF COMPANIES LISTED AT THE NAIROBI SECURITIES EXCHANGE: THE INFLUENCE OF EXTERNAL ENVIRONMENT

Abstract

Boardroom squabbles and business failures have been witnessed throughout the world on
the corporate stage. Kenya has not been immune to the surge in corporate scandals and
bankruptcy sweeping the globe. Essentially, the idea is that a governance problem is a
crisis on the board of directors. The decrease in shareholder value is blamed on the board
of directors for the failure of most of the enterprises. The study's objective was to
determine how firms' external environment impacts the relationship between board
structure and performances of companies listed at the Nairobi Security Exchange (NSE).
The population of the study was made up of 66 firms listed at the Nairobi Securities
Exchange as at April 30th 2019. Primary and secondary data were gathered for the
purpose of the survey. The primary data was gathered via a structured questionnaire. In
addition, data was compiled from publicly available financial statements and reports for
NSE-listed companies as of 31st December 2019. The data were analyzed statistically using
descriptive and inferential statistics. Regression analysis was used to test the study
hypothesis. This study employed a descriptive cross-sectional design. According to the
findings, the external environment moderates the relationship between board structure and
performance of NSE-listed firms. Environmental scanning is critical for firms traded on
the Nairobi securities exchange to achieve financial and non-financial performance.
Therefore, there is a need to design management policies with a view that an appropriate
external environment enhances the organization's performance.

Keywords: Board Structure, External Environment, Performance, Nairobi Securities Exchange