Corporate Governance and Performance of Health Sector Non-Governmental Organizations in Nairobi County

Abstract

Health sector non-governmental organizations (NGOs) in Nairobi County play a pivotal role in providing health care services though questions pertaining to their governance, accountability and sustainability have persisted despite their growth and prominence. Prior research in corporate governance has shown that well-performing governance function coincides with high performing organizations. The study sought to answer the research question what is the relationship between corporate governance attributes (CEO duality, audit committee composition, gender diversity) and performance of health sector Non-Governmental Organizations in Nairobi County” through a self-administered cross-sectional survey using a random sample of 242 CEOs in from NGOs. The study was based on a positivist ontological paradigm and therefore used deductive reasoning and quantitative techniques. Descriptive statistics, correlation and regression analysis techniques were used to analyze the data collected. All the respondent NGOs had a mean board size of eight members with the mean number of female members being three per organization. Further, CEO duality, audit committee composition and gender diversity significantly influenced performance with all corporate governance variables combined accounting for 56.3 percent of the variability in performance. Specifically, whereas CEO duality and gender diversity significantly influence performance in health sectors NGOs in Nairobi County, Audit committee composition had a statistically insignificant influence. These findings suggest that NGOs should reconstitute their boards by merging the roles of the CEOs and chairpersons of the boards, appointing members without financial expertise to the audit committees in order to improve their performance and increasing the number of women board members. Additionally policy makers should consider developing corporate governance guidelines that are specific to NGOs

Keywords: Governance, Accountability, Performance, Diversity, Duality, Sustainability