Abstract:
The main objective of this research was to investigate the effects of corporate governance on financial performance of banks listed in the Nairobi Stock Exchange. The study examined the size of the board, number of board meetings, CEO duality, size of the company in terms of asset value and how they affect financial performance of banks listed in the Nairobi Stock Exchange. correlation research design was used in this study, the population in this study was the 11 banks trading in equity stocks listed in the NSE, in this case, 11 CEOs from the sampled banks were subjected to study, secondary sources were used to obtain information from the published annual reports and company sources for the year 2016.The content validity of the secondary data was assured by ensuring each of the items addresses specific contents and objectives of the study.
The performance of banks was measured using return on assets and return on equity, the study adopted correlation research design. The study found a strong relationship exist between corporate governance practices under study and financial performance. The size of the board, the board independence, the age of directors affects the financial performance of the firm.
