An Exploratoty study of corporate governance practices by funds management companies in Kenya
Kamanga, Benjamin Mutuku
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The dissertation is an exploratory study of corporate governance in fund management companies in Kenya. The overall objective of the study was to investigate the extent to which good governance is being practiced by fund managers in Kenya, and to assess the quality of those practices, with a view to providing data for developing effective programmes that might enable the sector to improve its standards of corporate governance. More specifically, the study sought to establish whether fund management companies can be considered to have adopted and implemented good corporate governance practices and , if so, to access the extent to which such practices have been adopted, how the companies are progressing in adopting best governance practices and the areas of governance that still need improvement. A review of relevant literature was done from which the conceptual framework of the study was developed and five prepositions were formulated. A structured questionnaire was used to guide in-depth interviews with senior managers of six leading fund management companies in Kenya. The study found out that there is a general appreciation, acceptance and commitment to good corporate governance and that the adoption of best practices has began to permeate fund management companies in Kenya but progress towards fully adoption and implementing good corporate governance is still in its infancy. The study also concluded that the quality of corporate governance by fund management companies is relatively underdeveloped; and, that to bring governance practices to internationally accepted levels the focus needs to shift from developing the codes and policies and regulations to developing structures and capacity, both in the companies and at the regulatory level. The study recommends, among other things, the establishment of appropriate board committees at company level, increasing the proportion of independent directors to majority, board and board committee evaluation, having corporate governance compliance office and the proper disclosure of both corporate governance practices and finnacial reports to all stakeholders.