Corporate Governance Practices and Financial Performance of Non-Governmental Organizations in Homa Bay County, Kenya

Abstract

Purpose: The purpose of the study was to establish of corporate governance practices on the financial performance of non-governmental organizations in Homa Bay County.

Methodology: The study employed descriptive research design and secondary data to study a population of 38 international and local NGOS registered under the NGO board and operating in Homa Bay County. The data collected was analyzed through descriptive and inferential statistics.

Findings: The study findings pointed to a relationship between corporate governance practices and financial performance. Number of board meeting was found to significantly influence financial performance. Board training and board diversity was found to have no significant influence of financial performance of non-governmental organizations.

Implications:  The overall conclusion was that corporate governance practice influences the financial performance of organizations NGOs in Homa Bay County. Individual variables analyzed showed that only board meetings significantly correlated with financial performance unlike other two dependent variables which did not have significant influence. However, when a regression analysis was done with all the three dependent variables, corporate governance practices came out as having a significant relationship with financial performance due to significance of board meetings.

Value: the study extends knowledge of theory building around the corporate governance around Non-Governmental Organizations. NGOs should widen their scope and adopt more corporate governance practices for better financial performance.  Organization should focus more on consistent meetings and monitoring of their performance, having more proactive boards and more relevant practices.

Key words: financial Performance, corporate governance practices, NGOs