Corporate Governance Reforms and the Relationship between Board Characteristics and Firm Value of Listed Companies in Kenya.

Abstract

This study sought to investigate the moderating effect of corporate governance reforms on the relationship between board characteristics and firm value. Upper echelons theory was employed. Panel data regression analysis was employed using 5-year data from 2014 to 2018 that involved 59 listed Kenyan firms. The findings indicate that board size and independent directors have a significant positive effect on firm value. Female directors negatively and significantly affect firm value before the introduction of corporate governance reforms but after corporate governance reforms are included in the analysis, female directors have a significant and positive effect on firm value. Corporate governance as a moderating variable had a significant and positive effect on the relationship between board characteristics and firm value. The recommendations are that listed Kenyan companies should continue with corporate governance reforms and consider increasing board sizes, female directors and independent directors to firm value.