Does board leadership influence bank innovativeness in Kenya (original) (raw)
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Board Composition, Strategic Leadership and Firm Performance: A Study of Commercial Banks in Kenya
International Journal of Business Marketing and Management (IJBMM), 2019
Boards of Directors are not only expected to monitor a company management; they are also held responsible for an organization's failure to attain organizational performance goals.The purpose of this study was to establish the relationship between board of directors' composition, strategic leadership and performance of commercial banks in Kenya. The specific objectives were to establish the relationship betweenboard size, non-executive directors, and board diversityand performance of commercial banks in Kenya and the extent to which strategic leadership moderates such relationships. This study was anchored on Agency theory and Resource Dependence theories. The study employed a correlational research design. The target population was all operational registered commercial banks in Kenya which are thirty nine (39) in number. Purposivesampling technique was utilized to pick target respondents (Chief Executive Officers and one non-executive director for each bank). Data was collected using questionnaires. Ordinal logistic regression analysis was performed on the data collected using R technique to estimate and provide empirical evidence on the nature of relationship between the bank performance and Board composition. The research hypotheses were tested by determining the significance of the regression coefficients of the estimated models. Board size, incorporation of non-executive directors to the board, embracement of strategic leadership was found to have a positive and significant relationship with the performance of commercial banks in Kenya. Based on the findings, the study recommends that; Banks should constitute boards whose sizes are relative to the size of the banks, the boards so constituted should reflect diversity in terms of professional background, gender and ethnicity,valuable balance between executive and non-executive directors; Boards of Directors should offer strategic leadership by drawing strategic plans detailing clear strategic objectives on key areas of operation, disseminating the same to bank employeesfor buy in and smooth execution of the same. Further, banks should employ people with strong strategic orientation especially at the top level management and invest resources in developing capacity for strategic leadership.
Effect of Board Social Capital on Innovativeness in the Banking Industry in Kenya
Extant literature on impact of board capital on firm innovativeness, was prior to this research inconclusive, with some studies showing positive, negative or no effect. Anchored on agency, resource dependence and social capital theories, the researcher sought to determine impact of social capital on innovativeness in banks. Kenya has experienced innovations in the banking sector driven by mobile technologies. The researcher hypothesized that social capital positively impacts firm innovativeness. Independent variables were director interlocks, status and prestige of the directors and presence of personal or other affiliations between directors and the bank or chief executive. Two control variables were added, to mitigate their confounding effect on bank innovativeness. A causal research design was selected and purposive sampling undertaken to choose respondents to a questionnaire. Unit of analysis was boards of banks. 32 questionnaires were returned, a response rate of 74%. Data was analyzed using SPSS, after testing for assumptions made. The study found there was statistically significant relationship between director interlocks and status and prestige of the directors and innovativeness of banks. This study resolved disagreement in extant literature, concluding that board interlocks and board status and prestige were found to drive innovativeness. There was no statistically significant relationship between presence of personal or other affiliations between the directors and the bank or chief executive and bank innovativeness. This study benefits management, in providing a selection criteria for directors of entities focusing on innovativeness. Major limitation of the study is the narrow focus on banking sector impacting generalization of the study.
Managerial Innovation and Competitiveness of Commercial Banks in Kenya
May to June 2023
This study investigated on the influence of managerial innovation on competitiveness of Commercial Banks in Kenya. This study used the descriptive and correlational research designs with the sample of 175 middle level management employees (directors and general managers) through stratified and simple random sampling. The study used a questionnaire as the main source of data from the field. The questionnaire was developed by the researchers through the reading of literature and previous studies. Data was analyzed using the descriptive statistics and Pearson Correlations. The bank showed proof of existing elements of competitiveness. Managerial innovation has a significant positive influence on competitiveness of commercial banks in Kenya. The study recommends that commercial banks in Kenya should continue to embrace subjects of managerial innovation. The study also recommends that commercial banks should regularly review elements that exhibit competitiveness and act accordingly for i...
Board Leadership, Chief Executive Officer Optimism and Firm Innovation
SEISENSE Journal of Management, 2019
Purpose - Following the resource dependence and optimism theory, the study explored whether Chief Executive Officer (CEO) optimism moderates the link between board leadership and firm innovation in the financial sector. Design/Methodology - 130 financial institutions in Kenya were surveyed using cross-sectional and explanatory designs. Hypothesis testing utilized both moderated hierarchical regression models and mod-graphs. Findings - The results revealed that the board member’s openness and independence positively influence firm innovation. The moderated hierarchical regression results and figures in the mod-graphs reveal that CEO optimism enhances the association between the board member’s openness, independence, and firm innovation. Practical Implications - The results suggested that for financial institutions to be innovative, board members should be open to each other in terms of the private ideas as well as being independent about decisions made to spur the growth of the firms...
Effect of Innovation Culture on Performance of Commercial Banks in Eldoret Town, Kenya
International Journal of Scientific and Technological Research , 2019
ABSTRACT The banking industry is constantly changing. Regulations shift, ever changing customer demands and technological advances, creating the need for banks to be able to adopt quickly in order to stay competitive. Despite previous empirical evidence that links financial innovations with improved banking performance, overall performance of commercial banks in Kenya have been inconsistent. The main purpose of this study was to find out the effect of innovation culture on the Performance of Commercial Banks in Eldoret town. This research employed a survey research design. Diffusion of innovation theory was used to support the study. The study targeted 393 and sampled 198 respondents drawn from 11 Commercial banks in Eldoret town, who were selected from three tiers categories of banks. The study used questionnaires and datasheet as the main data collection instruments. Quantitative data was collected using questionnaires and data sheets. Data analysis was done using SPSS. Data was analyzed using both quantitative and qualitative analysis. Quantitative data from questionnaires was analyzed descriptively by use of mean and standard deviation. Inferential statistics was done to show the relationship between the study variables in the study by testing statistical hypotheses; the study used multiple regression analysis. This study was significant to policy makers and regulators in developing policies for regulation of Commercial Banks. Data was presented in form of tables and figures. The study found that innovative culture was positively and significantly influence performance of commercial banks (β3=0.255, p=0.006). The study concluded that the bank managers should strive to achieve speed, dynamism and customer centricity of digital players in order to remain competitive in the digital transformation. The study suggests further research to examine the moderating role of transformational leadership in formulation, implementation and monitoring of innovative strategies on the performance of Commercial bank
Do Boards and Ceos Matter for Bank Performance? A Comparative Analysis of Banks in Ghana
Corporate Ownership and Control
In this study, we examine whether Board characteristics have impact on bank performance by comparing listed and non-listed banks. The study uses panel data covering the eight year period, 1997– 2004 from all the 18 Banks in Ghana. Findings of the study confirm earlier studies. While the size of the board has positive correlation with bank performance whether listed or not listed, the more independent a board is the better the performance in spite of a bank’s listing status. Of significance is the finding that when a CEO doubles as a board chairman, it impact positively on performance in the overall sample, but negatively in both sub-samples.
Does CEO Traits Influence Innovation? Evidence from the Kenya Banking Sector
Journal of Accounting, Business and Finance Research, 2019
Empirical research on firm innovation has provoked mixed reactions from various scholars in the recent past. The main purpose of this study is to determine the influence of CEO traits on innovation among financial institutions in Kenya on the basis of upper echelons and optimism theories. The study used the design of the explanatory survey. The survey data for 130 stratified financial firms were analysed using both descriptive and inferential statistics. Regression analysis was used to test the hypothesis. The findings indicate that the CEO's optimism, humility, and narcissism all had a positive effect on firm innovation. The consequences are that innovation in financial institutions is increasing when CEOs are optimistic, humble and narcissistic. The results suggest that, in order for financial institutions to be innovative, they need to have the CEOs who are optimistic and who epitomize visionary objectives to be committed to innovation. Likewise, they should have CEOs who are humble enough to involve key stakeholders and a narcissistic CEO who can stand decisively for organizational change in the form of innovation. This study is important in understanding how the CEO's personality contributes to firm innovation.
Journal of Finance & Investment Analysis, 2018
The corporate scene has witnessed boardroom tussles and corporate collapses around the globe. The underlying thesis is that a crisis of governance is basically a crisis of board of directors. The decline in shareholders’ wealth and most of these firm failures has been linked to the board of directors. The general objective of the research was to examine whether an association exists among board structure, and performance of financial institutions in Kenya. The study hypothesized that the influence of board structure on performance is not significant. Secondary data was collected from financial institutions in Kenya for a ten-year period from 2006 to 2015. The study used both a correlational descriptive research design and cross sectional survey design. The data collected was subjected to correlation, generalised estimating equation and regression analysis. The conclusions brought out mixed findings. Board structure was disaggregated into size, type, independence, activity, diversity and CEO duality. The results show that, board structure had independent significant influence on performance of financial institutions. Of the six board structure variables, board activity operationalized as the number of meeting in a year had a strongest independent influence on performance of financial institutions followed by board type. The results are in support of the agency theory and the convergence-of-interests theory. The results indicate that there is an optimal number of board of director meetings that have a significant influence on performance of financial institutions. The number of board of directors’ meetings which optimize firm performance was found to be 11 to 15.
Financial Innovation Strategies and Performance of Commercial Banks in Kenya
Journal of Strategic Management
Purpose: The purpose of the study was to establish the impact of financial innovation strategies on performance of commercial banks. Methodology: The study used census approach and targeted all the 41 commercial banks in Kenya. This is because the population is small. Senior Operations and the Senior Finance managers working in the headquarters of the commercial banks were targeted. This was therefore a total of 82 respondents. The research adopted cross-sectional survey. The study used both primary and secondary data. Primary data was collected using questionnaires while Secondary information was acquired from the commercial banks' audited financial statements. After quantitative data was obtained through questionnaires, it was prepared in readiness for analysis and keyed into statistical package for social sciences (SPSS) computer software (version 22) for analysis. Findings: Results from both primary and secondary data showed that financial innovation strategies had a positi...
BOARD STRUCTURE, CEO TENURE, FIRM CHARACTERSITICS AND PERFORMANCE OF FINANCIAL INSTITUTIONS IN KENYA
European Scientific Journal, 2017
The broad objective of this research was to determine whether board structure, affects performance of financial institutions in Kenya and what is the intervening and mediating influence of the tenure of the CEO and firm characteristics on this relationship. The specific objectives included; to examine the influence of board structure on performance of financial institutions in Kenya; to determine the intervening influence of CEO tenure on the association among board structure and performance of financial sector firms in Kenya; to examine the moderating effect of firm characteristics on the association among board structure and performance of financial institutions in Kenya; and to ascertain the joint effect of board structure, CEO tenure and firm characteristics on performance. Secondary data was collected for a ten-year period from 2006 to 2015. Moderated and stepwise regression models and correlation analysis were adopted to investigate the association among the variables.The results show that, board structure had independent significant influence on performance of financial institutions; there was no significant intervening effect of CEO tenure on this relationship; there was a significant moderating effect of firm characteristics on the relationship and the joint effect of board structure, CO tenure and firm characteristics was significant. Through the study formulation of managerial policy and practice that promote better governance practices and appropriate firm characteristics that improve performance of financial institutions will be enhanced.