The Effect of Board Structure and CEO Tenure on Performance of Financial Institutions in Kenya
J. Aduda and
Journal of Finance and Investment Analysis, 2018, vol. 7, issue 1, 4
The objective of this study was to determine whether a relationship exists amongÂ board structure, CEO tenure, and performance of financial institutions in Kenya.Â The study hypothesized that the influence of board structure on performance is notÂ significant; there is no significant intervening effect of CEO tenure in theÂ association among board structure and performance; and there is no significantÂ joint effect of board structure and CEO tenure on performance. Secondary dataÂ was collected for a ten-year period from 2006 to 2015. Hierarchical regressionÂ analysis was performed on the variables. The results show that, overall, boardÂ structure had independent significant influence on performance of financialÂ institutions. Board activity had a strongest independent influence on performanceÂ of financial institutions followed by board type. The findings further show thatÂ CEO tenure is not a significant intervening variable in this association; and, thatÂ board structure, and CEO tenure jointly have a significant effect on performance.Â The study has reduced the dearth of literature on board structure and performanceÂ and uncovered the importance of CEO tenure on this relationship. Formulation ofÂ managerial policy and practice that promote better governance practices thatÂ improve performance will be enhanced.JEL classification numbers: L25, D22Keywords: Board Structure, CEO Tenure and Firm Performance
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Persistent link: https://EconPapers.repec.org/RePEc:spt:fininv:v:7:y:2018:i:1:f:7_1_4
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