Corporate Governance and Performance of Local Petroleum Companies in Kenya

Abstract

The decline in the market share was as a result of stiff competition from the multinationals, which has continued to affect the organizational performance of local petroleum firms in Kenya. The purpose of this study was to determine the relationship between corporate governance and organizational performance of local petroleum companies in Kenya, as listed by Energy and Petroleum Regulatory Authority. The study population was 834 local petroleum companies in Kenya licensed by Energy and Petroleum Regulatory Authority as of August December 2022. This study was anchored on Theory of Transformation Leadership and supported by Institutional Theory and Resource Dependence Theory. These theories are linked to corporate governance, strategy implementation, government regulations and organizational performance variables. Primary data was collected using structured and unstructured questionnaires. The study was guided by positivism philosophy and the data collected was coded and analyzed using Statistical Package for Social Sciences (SPSS version 22) and be presented in bar charts, percentages and tables. Data was analyzed using ANOVA, correlation and multiple regressions. The study result showed that the coefficient of determination adjusted R Square is 0.593. The model indicates that corporate governance explains 59.3% of the variation in organizational performance of local petroleum companies. The study findings indicated that corporate governance had a significant relationship with organizational performance of local petroleum companies in Kenya. The study recommends that companies be encouraged to adopt good corporate governance practices.