Corporate Governance Practices and Performance of Kikima Dairy Co-operative Society

Abstract

Dairy cooperative societies in Kenya play a vital role since they provide members with opportunities of spurring financial, economic and social growth. Corporate governance is considered as the most efficient way of supervising the operations of a firm and ensuring that the main goals of a firm are maximized to make sure that shareholders wealth is taken care of. Corporate governance can also be used to reduce misconduct by organizations and ensure enforcement of policies and decisions aimed at securing rights of shareholders and other stakeholders. This study seeks to determine the influence of board leadership, ethics-based culture and human resource management on performance of Kikima Co-operative Society. The study employs a descriptive research approach with a target population of 28 assistant supervisors, four executive committee members, six members of board and five supervisory committee members. This study used desk study to gather information and research questionnaires to acquire data. The data collected was qualitative data and was analyzed using the Statistical Package for Social Sciences (SPSS) analysis software. The study established that growth in membership as indicated by 36 of the respondents, increase in deposit by 35 and customer satisfaction by 37 had a significant influence on the performance of Kikima Cooperative Society. It’s clear that there is a strong and positive statistical correlation between corporate governance practices and performance of Kikima cooperative society as indicated by R2= 0.825 and adjusted R square 0.789 that revealed that 82.5% change in organizational performance can be explained by the changes of all the predictor variables. It also showed that the independent variables had a strong relationship with the dependent variable. The results indicate that board leadership, ethics based culture and HRM positively influence Kikima cooperative society. The study recommended that Kikima should employ competent board of directors who are able to add value to the society.