Corporate Governance Practices and Performance of Coffee farmer‘s Co-operative Societies in Kenya

Abstract

The central thesis in this paper is that the performance of coffee farmer’s co-operative societies is a function of corporate governance mechanisms; Board Size, Board Composition and status of the Chief Executive Officer (CEO). The research settled on Cash Coverage Ratio and Return On Assets, as performance variables and was guided by the null hypothesis that there exists no linear relationship between the performance variables and the corporate governance mechanisms..The regression analysis result showed that there exist a linear relationship between performance and corporate governance practice in farmer’s co-operative societies, thus rejecting the null hypothesis. In genera the findings were ; societies with smaller size of boards posted better performance as compared with those with bigger sizes more than 9 members. The same results were for those societies whose board comprised of individuals with a mix of skills and the role of the CEO was separate from that of the Chairman. Indeed as suggested by the results the failure by coffee farmer’s co-operative societies in Kenya to embrace corporate governance have made them not to underperform.

Keywords: Corporate Governance, Corporate Governance Mechanisms, Performance

Unique Article ID: IJSBER-122

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