Influence of CEO Duality on non-financial Performance of Commercial State Corporations in Kenya

Abstract

Firm performance provides an overall indication of how effectively commercial state corporations utilize their resources, implement strategies, respond to environmental changes, and achieve their organizational objectives. With the increase in major scandals, financial meltdowns, and surprise corporate failures, there’s been a growing prominence on the necessity of operative corporate governance practices to prevent risks. The objective of this study was to determine the relationship between CEO duality and non-financial performance of commercial state corporations in Kenya. The study was anchored on agency theory since government commercial entities involve a clear principal agent association. The study applied positivism research philosophy and descriptive cross-sectional design with target population constituted 47 commercial state corporations. A structured questionnaire that contained closed ended questions was used to collect data from the respondents. Data collected was analysed using linear regression analysis at a 95% confidence interval in order to examine significance of the relationships between the variables and to test the hypotheses. The study concluded that CEO duality negatively influences the non-financial performance of commercial state corporations in Kenya, supporting the agency theory perspective that concentration of executive authority may weaken accountability and independent oversight. The findings of the study showed that CEO duality is an integral practice of corporate governance that contributes to non-financial performance of commercial state corporations in Kenya. It underscores the importance of building leadership capacity, designing context-sensitive governance frameworks, and maintaining strategic agility in the face of a changing environment. The study recommends separating the CEO and board chairperson roles to strengthen board independence, transparency and effective monitoring of management decisions. Commercial state corporations should also enhance governance policies, establish clear non-financial performance indicators and strengthen accountability mechanisms. Furthermore, organizations should promote effective stakeholder engagement and regularly evaluate governance practices to improve service delivery and organizational effectiveness. Future studies should examine other governance and institutional factors that may explain variations in the non-financial performance of commercial state corporations in Kenya.

Keywords:       CEO Duality, Non-Financial Performance, Commercial State Corporations.