Corporate Governance Practices and Performance of Kenya Revenue Authority, Nairobi County

Abstract

Corporate governance can potentially impact every aspect of how we conduct business today and more so, many companies internationally are willing to take the risk because results are great and outstanding. Adherence to corporate governance especially for public institutions can result in enormous reductions in cost or removal of unnecessary steps that cut down on time. The main research objective is to establish the influence of corporate governance practices and performance of Kenya Revenue Authority. The specific objectives of the study was to establish the influence of board structure on performance of Kenya Revenue Authority, to examine effect of ethical practices on performance of Kenya Revenue Authority, to establish the influence of CEO duality on performance of Kenya Revenue Authority, and to determine the effect of audit committees on performance of Kenya Revenue Authority. This study was guided by three theories which include the resource dependency theory, stewardship theory, and agency theory. The present study employed a case study approach and adopted descriptive research design. This study targeted all the employees at KRA (Kenya) which currently has a pool of 289 employees based in the Headquarters (Times Towers) (KRA, 2017). Simple random sampling technique was used to select 60 personnel from the population which represents 20.76% of the whole population. This study used both primary and secondary data. Primary data was collected through interviews while secondary data involved other sources of evidence such as internal company documents and company websites. Questionnaires were administered to the respondents through a drop and pick method. The researcher left the respondents to fill the questionnaire at their own time and collect the completed form within one week. This availed the respondents enough time to read, understand and fill the forms with maximum concentration. The Data obtained from the field was checked. The study generated both qualitative and quantitative data. For the quantitative data, regression analysis was used to examine the relationship between the variables. The qualitative data was first organized into themes corresponding to the study objectives. Content analysis of qualitative data included text analytics and document analysis. The validity of the data was measured by data obtained from senior managers of various departments of KRA.  The significance of the study is that it would help researcher understand how corporate governance affects organizational performance. From the findings, the performance of Kenya Revenue Authority is significantly influenced by the corporate governance practices employed by the governance committee which also scrutinize all matters relating to corporate governance in the company and meets at least once during the year. There is also a nomination committee that lead the process for board appointments, make recommendations to the board and be involved with succession planning in the company. The researcher recommends that, the management should maintain and develop a responsible, creative, innovative board and a more appropriately elected and governed boards since transparency is one of the most essential indicators for evaluating corporate performance.