The Influence of corporate governance mechanisms on the faith-based hospital’s performance: a case study of Murang’a and Kirinyaga County

Abstract

Faith-based organizations (FBOs) are critical to the development of the healthcare system in developing countries as they provide healthcare services to those who would not otherwise access them in private for-profit and public healthcare facilities. FBOs are operating in a rapidly changing environment, and they are responsive to the global and regional forces that demand faith-based healthcare organizations to have sound corporate governance. The study aimed to explore the influence of corporate governance mechanisms on the performance of faith-based hospitals. The aims of the study were (1) to explore the influence of diverse expertise and skills of board members on the performance of the FB hospitals, (2) to explore the influence of the board compensation on the performance of the FB hospitals, and (3) to explore the influence of transparency & fairness on the performance of faith-based hospitals in Murang'a and Kirinyaga Counties. The study employed a correlational quantitative research design. Stratified sampling was carried out to include members of Kirinyaga and Murang’a County faith-based hospital boards, hospital management team, and departmental heads. The sample size was 120 respondents; targeted to fill a closed questionnaire disseminated using Google Form email for effective data collection. Data analysis was carried out using PSPP statistical software and multiple regressions were conducted. Findings reveal that diverse skills and expertise do not significantly correlate with hospital performance. However, efficient remuneration policies, particularly board compensation, positively impact certain performance metrics like normal bed occupancy. Transparency & fairness demonstrate significant positive correlations with patient feedback and timely payments but do not significantly associate with financial stability. Future research should explore additional governance mechanisms and their effects on hospital performance, as well as investigate interventions to address identified gaps. Recommendations include strengthening board composition, enhancing transparency and fairness, reviewing compensation structures, and fostering a culture of continuous improvement.

KEYWORDS: Corporate Governance Mechanisms, Corporate Governance, Corporate Mechanisms, Faith-based Organizations, Organizational Performance, Board.