Corporate Governance Reforms and Establishments' Performance and Investor Confidence. A Case of Insurance Companies in Kenya
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Abstract
The study’s objective is to investigate the distinct challenges that African countries encounter in establishing robust governance systems, especially in light of the concentrated state and family shareholding patterns that are common in the region. It aims to underscore the significance of customized governance models that incorporate alternative discipline and oversight mechanisms, as opposed to the dispersed ownership structures typical of developed economies. This study adopts a comprehensive literature review methodology, scrutinizing key theories such as agency theory, transaction cost theory, and stakeholder theory. These theories offer valuable perspectives on optimal governance orientations. Additionally, the research delves into detailed governance mechanisms like board oversight, executive compensation, financial disclosures, and risk management integration. It also considers the potential for localized application of influential regulations and guidelines, including the Sarbanes-Oxley Act, OECD principles, and African governance codes. The findings indicate that the development of effective governance systems in African settings is a dynamic challenge. It necessitates a commitment to the fundamental principles of accountability and ethics while also accommodating societal interests and discretion. The study highlights the need for balanced governance frameworks that maintain standards and oversight yet remain attuned to local nuances as concentrated ownership structures evolve alongside financial development. The research culminates by emphasizing the importance of fostering cultures of integrity among leadership, within mechanisms, and through incentives. This is essential for building trust among investors and the community via improved governance. The study points out that the advancement of ethical and sustainable progress in African nations depends on the successful adoption of corporate governance practices that reconcile global standards with local conditions.
Keywords: Corporate Governance, Reforms, Establishments' Performance, Investor Confidence, Insurance Companies
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References
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