SHAREHOLDER ASSEMBLY, BOARD CHARACTERISTICS AND PERFORMANCE OF PRIVATE SECURITY FIRMS IN KENYA

Abstract

The general objective of the study was to examine the relationship between corporate governance and performance of private security firms in Kenya. The specific objectives of the study were: To determine relationship between shareholder assembly and board characteristics on performance of private security firms in Kenya. The study was grounded on the Agency Theory and Stewardship Theory. The study applied descriptive analysis with a positivist approach. The study participants were members of Kenya Security Industry Association (KSIA) and Protective Security Industry Association (PSIA), since they had representation in Private Security Regulatory Authority (PSRA) board. The private security firms had a complement of 896 (336 board members and 560 managers) according to the Human Resource departments in the private security firms to be studied. The study sample size was 384 respondents. Structured questionnaires and performance reports were used in eliciting data. The study adopted a questionnaire as the data collection instruments to compliment by other secondary sources.Results revealed that all the corporate governance practices had a positive and significant relationship with performance of private security of firms in Kenya.. The study concluded that corporate governance practices had the potential of positively influencing performance of security firms in terms of profitability, customer satisfaction and market share. The results support the current theories related to the study. Consequently, this study provides security firms with insights of how to improve performance through the adoption of appropriate corporate governance. The study recommended that security firms should adopt a culture of adopting appropriate governance dimensions (shareholder assembly, board characteristics). This could go a long way in ensuring there is improved performance of private security firms in Kenya. Keywords: Corporate Governance, Shareholder Assembly, Board Characteristics, Performance, Private Security Firm