Investigating the influence of women on boards in shaping corporate governance practices of listed companies in Kenya

Abstract

The aspect of corporate governance practices in organizations remains a fundamental issue to practitioners, policymakers, and researchers in corporate governance. The general objective of this study was to assess the influence of women in shaping corporate governance practices in publicly listed companies in Kenya. The specific objectives being to investigate how the role of women directors influences corporate governance practices of boards of publicly listed companies, investigate the value of women directors in enhancing corporate governance practices within the boards of publicly listed companies in Kenya and to investigate the extent of adherence to the one-third rule on gender diversity by the public listed firms in Kenya. The supporting theories in the study were the group diversity theory, agency theory and institutional theory. The study adopted the descriptive cross-sectional design which targeted 65 listed firms at NSE whereas the unit of observation were the company CEO and company secretary from each of the listed companies. Thus, the study population was 130 respondents comprising 65 CEOs and 65 company secretaries. Primary data was collected using a self-administered questionnaire for both the company CEOs and company secretaries. In addition, an interview session with the company secretaries was also conducted, within the mixed-methods sequential explanatory design. Data analysis was carried out using SPSS Version 28.0 generating descriptive and inferential statistics while content analysis was used to analyze qualitative data. From the data analysis, a positive significant relationship was established between the role of women directors and corporate governance practices of boards of publicly listed companies in Kenya (β 0.678, p<0.05), the value that women directors have that enhance corporate governance practices within the boards of publicly listed companies (β 0.593, p<0.05) and the adherence level of the one-third rule on gender diversity by the public listed firms (β 0.497, p<0.05). The study concluded that women directors have a positive significant influence on governance practices of the NSE listed companies. The study hence recommends more representation of women in governance boards and stricter compliance with NSE listing rules and CMA regulations on adherence to the one third gender rule. Key words: women in boards, corporate governance practices, listed companies, Kenya