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[ISSN 2519-5883]
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Now showing 1 - 5 of 7

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Risk management practices and financial performance of individual pension schemes in Kenya: the moderating role of regulatory frameworks
(Strathmore University, 2025) Ojwang, C. A.
Investments in Kenya’s pension industry have experienced significant volatility, leading to fluctuations in financial performance and periods of negative returns. This study explores the effects of risk management practices—internal controls, risk assessment, and risk avoidance—on the financial performance of Kenya’s registered individual pension schemes. Anchored in modern portfolio theory and agency cost theory, the research adopted a quantitative, descriptive design targeting the finance team from all 48 registered individual pension schemes in Kenya. A census approach was employed, with structured questionnaires administered electronically to the 48 individual pension schemes, achieving a 98% response rate (47 respondents). Data were analyzed using correlation and cross-sectional OLS regression. Key findings revealed a significant positive effect of risk avoidance practices on financial performance, while internal controls and risk assessment showed statistically insignificant direct effects. The regulatory framework significantly moderated the relationship between risk avoidance and performance amplifying its positive impact. Correlation analysis further confirmed strong associations between all risk management practices and financial outcomes Notably, adherence to regulatory guidelines correlated strongly with improved performance The study concludes that pension schemes must prioritize risk avoidance strategies and align them with regulatory requirements to enhance financial sustainability. Recommendations include institutionalizing proactive risk evaluation protocols, strengthening compliance with Kenya’s Retirement Benefits Regulations (2023), and integrating risk-adjusted metrics into performance monitoring. These findings offer actionable insights for policymakers and scheme managers to mitigate systemic volatility and improve long-term returns. The study acknowledges limitations, including its focus on individual pension schemes in Kenya, which limits generalizability to other pension models or regions. The cross-sectional design restricts causal inferences, and the reliance on self-reported data introduces potential response bias. Additionally, the omission of variables like leadership commitment and macroeconomic factors may oversimplify the complex drivers of financial performance. Despite these constraints, the research contributes theoretically by refining agency and modern portfolio theories, demonstrating how internal controls mitigate agency costs and how risk avoidance aligns with risk-return optimization. Practically, it offers policymakers and pension managers actionable insights, emphasizing the integration of risk avoidance with regulatory compliance, advanced technologies, and adaptive governance. The findings also highlight the need for future longitudinal and mixed-methods studies to explore temporal dynamics and contextual nuances. The study concludes that pension schemes must prioritize risk avoidance strategies and align them with regulatory requirements to enhance financial sustainability. Recommendations include institutionalizing proactive risk evaluation protocols, strengthening compliance with Kenya’s Retirement Benefits Regulations (2023), and integrating risk-adjusted metrics into performance monitoring. These findings offer actionable insights for policymakers and scheme managers to mitigate systemic volatility and improve long-term return
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The Effects of cognitive biases on investment decisions among retail investors at the Nairobi Securities Exchange
(Strathmore University, 2025) Sheikh, S. A.
Financial markets play a crucial role in economic development through capital mobilization and allocation, yet retail investor participation in the Nairobi Securities Exchange (NSE) remains low despite various policy interventions. While traditional finance theories such as the modern portfolio theory assume investor rationality, behavioral finance theories such as the prospect theory recognize that psychological factors significantly influence investment decisions. This research investigated the effects of cognitive biases on retail investors' investment decisions in the Nairobi Securities Exchange (NSE). The specific objectives were to investigate the effect of anchoring, illusion of control and loss aversion biases on retail investment decisions retail at the NSE, Kenya. The study surveyed 88 active retail investors in April 2025 in Nairobi County using structured questionnaires that were administered online. The study adopted a quantitative approach to collect and analysing data the Statistical Package for Social Sciences. The collected data was coded and classified appropriately to ensure responses were processed correctly. It was revealed that all three behavioral biases, anchoring bias illusion of control bias, and loss aversion bias had a positive significant influence on retail investors' investment decisions at the NSE. The study recommends intensified investor education programs to address these behavioral biases, collaboration among regulatory bodies and financial advisors to develop training on rational investment approaches as well as incorporation of behavioral awareness into financial literacy campaigns to help investors recognize and mitigate the impact of psychological biases on their financial choices. The study limitations were that of overreliance reliance on self-reported data, which may be subject to bias in social desirability or inaccurate self-assessment. It also focused on individual investors at the Nairobi Securities Exchange, which may limit the generalizability of the findings to institutional investors or investors in other markets. Key terms: Cognitive biases, Investor behavior, Nairobi Stock Exchange.
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Effect of integrated risk management on financial performance of commercial parastatals in Kenya moderated by risk maturity
(Strathmore University, 2025) Wangombe, A. W.
This study investigated how integrated risk management (IRM) affects the financial performance of Kenyan commercial parastatals and moderating role of risk maturity. Commercial Parastatals in Kenya contribute to the economic development of the country, through their contributions in various sectors such as Transport, Agriculture, Energy and public services. However, these organizations face several challenges which threaten their performance and sustainability. While risk management practices, such as risk1 identification, analysis, and mitigation, are known to impact financial outcomes in various sectors, the application of IRM within Kenyan parastatals remains underexplored. The objectives of the study were to assess the influence of risk identification, risk analysis and risk mitigation on financial performance of commercial parastatals in Kenya and to establish the moderating influence of risk maturity level on the association between IRM and the financial performance of commercial parastatals in Kenya. The study was based on Resource based view (RBV) and contingency theory and adopted a descriptive correlation research design. The target population for this study consists of all the 30 commercial state parastatals in Kenya with a total of 1813 employees. A purposive sampling technique was employed for senior management to ensure that key decision-makers with relevant expertise are represented. For each of the 30 commercial parastatals, three purposive respondents were selected from senior management thus a sample size of 90. Structured questionnaires and a data collection sheet were used in data collection. Data collected was analysed using descriptive and inferential statistics. The study found that risk identification and risk analysis have a positive and statistically significant impact on financial performance of commercial parastatals in Kenya. Risk Mitigation was also statistically significant thus a key driver of financial performance in commercial parastatals in Kenya. The study confirms that risk maturity is a significant moderator in the relationship between integrated risk management and financial success in commercial parastatals. The study recommends that the commercial parastatals should implement structured mechanisms for employee input, such as anonymous suggestion systems and regular feedback forums. They should institutionalize risk analysis frameworks such as scenario analysis and quantitative scoring across all departments. Management of the commercial parastatals should conduct regular internal audits to assess adherence to mitigation strategies and effectiveness of control measures. Parastatals should also implement targeted capacity-building programs.
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Influence of Environmental, Social, and Governance (ESG) practices on employee engagement in companies listed on Nairobi Securities Exchange in Kenya
(Strathmore University, 2025) Kieti, D. M.
This research sought to determine the influence of Environmental, Social, and Governance (ESG) practices on employee engagement in companies listed on the Nairobi Securities Exchange in Kenya. This study was guided by the following research objectives: to analyse the influence of environmental practices on employee engagement in NSE-listed companies, to establish the influence of social practices on employee engagement in NSE-listed companies, and to determine the influence of governance practices on employee engagement in NSE-listed companies. This study was grounded in stakeholder theory and social exchange theory. This study was based on the positivist research philosophy. This study adopted a descriptive cross-sectional research design. The study assumed a census approach. The study adopted a quantitative approach in data analysis. To analyze all three objectives of the study, descriptive statistics and inferential statistics were employed. The findings showed that the regression model was statistically significant, and the analysis confirms that environmental, social and governance practices have a significant and positive influence on employee engagement. The study concluded that environmental, social and governance practices have a significant and positive influence on employee engagement in NSE-listed companies. The study recommended that NSE-listed companies should enhance ESG practices, focusing on environmental and social initiatives to boost engagement. Further research should explore how Stakeholder Theory and Social Exchange Theory apply to ESG practices, particularly in aligning practices with employee expectations and fostering greater engagement. Companies should strengthen CSR initiatives, integrate ESG compliance into policies, prioritize inclusive decision-making, and align ESG initiatives with cultural values to enhance engagement. Future studies should explore the long-term impact of ESG practices on employee engagement, examine industry-specific relationships, and investigate the role of cultural factors in ESG effectiveness.
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International Men's Day
(2024-11-22) Ndunge, Angela (Dr); Ngoye, Ben (Dr.)