Governance, Risk, and Regulation: A Framework for Improving Efficiency in Kenyan Pension Funds

Sylvester Willys Namagwa

Papers from arXiv.org

Abstract: As life expectancy in Kenya increases, so does the need for efficient pension schemes that can secure a dignified retirement and protect members from old age poverty. Limited research, however, has explored the efficiency of these schemes under existing governance structures. This study addresses that gap by examining the combined effects of corporate governance, risk management, and industry regulation on pension scheme efficiency in Kenya. Using a quantitative design, we conducted a panel regression analysis on a seven-year secondary dataset of 128 Kenyan pension schemes, totaling 896 observations. Our results reveal significant insights That the presence of employee representatives on the board and effective risk management have a significant positive effect on efficiency. Conversely, independent board members exhibit a significant negative effect. Other factors, including top management representation, female board members, and industry regulation, showed no significant effect on efficiency in the joint model. These findings suggest that the impact of governance and risk management on efficiency is nuanced, with specific factors like employee representation playing a more prominent role. We propose that the electoral process for employee board members may introduce a Self Cleaning Mechanism that progressively enhances scheme efficiency. This mechanism offers a novel theoretical extension of Agency Theory, explaining the convergence of interests between elected trustees and scheme members.

Date: 2025-11
New Economics Papers: this item is included in nep-age
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Journal of Financial Risk Management, 2025, 14(4), 428-455

Downloads: (external link)
http://arxiv.org/pdf/2511.10999 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2511.10999

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().