Influence Of Corporate Governance On Risk Management In The Horticultural Sector In Kenya

Abstract

Corporate governance are mechanisms put in place to ensure that the firm is properly run and transparent in order to increase the firm value for the benefit of the shareholders and other stakeholders. Due to the 2007 global financial crisis and several corporate failures, there have been immense calls for good corporate governance practices to be employed in the running and managing of corporations. Good corporate governance helps the corporations in managing risks. This study investigated the influence of corporate governance on risk management among the flower farms in Kenya. Specifically, the study investigated the influence of managerial skills, internal control systems, organizational transparency, ownership structure, and board independence on risk management among the flower farms in Kenya. The study used the descriptive research design. The target population was all the 40 flower farms in Naivasha and a sample of 170 respondents. The questionnaires were used to collect data. The data was analyzed using SPSS. The findings revealed that internal control, organization transparency, board independence have a significant effect on risk management practices of flower farms. On the other hand, the findings of the study revealed that management skills and Ownership structure had no effect on risk management practices. The findings thus conclude that internal control, organizational transparency and board independence affects the implementation of risk management in flower firms. Thus the study recommends that that organizations should improve on internal control systems, organization transparency and board independence since these improve risk management practices.