Corporate Governance, Strategic Choices and Performance of Financial Institutions in Kenya

Abstract

It has been argued that corporate governance plays a critical role in determining the strategic direction of corporations. This is achieved through formulation of strategic choices that utilizes firm’s internal resources to align corporations to the external environment for optimal performances. In this study, we sought to determine the influence of corporate governance and strategic choices to the performance of financial institutions in Kenya. A cross sectional descriptive research design was adopted and, primary data collected from top executives of 108 financial institutions. We analyzed data using regression analysis. Results indicate that corporate governance and strategic choices significantly influences organizational performance. Further, the study revealed a partial mediation of strategic choices to corporate governance and organizational performance. It was concluded that besides corporate governance being a key determinant of performance in organizations, adoption of appropriate strategic choices greatly enhances the performance. The results are important to organizational leaders, policy makers, investors and all corporate stakeholders in determining optimal strategies for organizational posterity.