Corporate Governance, Top Management Capabilities and Performance of Commercial State Corporations in Kenya

Purpose: Commercial state corporations refer to a State or county corporation or agency and includes a subsidiary of a state or county agency. Commercial state corporations can perform roles commercially and some non-commercially but which serve a strategic socio-economic objective as may be defined by the president in various instances. Commercial state corporations are central players in the initiative to foster national growth. The objective of this study was to determine the top management in the relationship between corporate governance and performance of commercial state corporations in Kenya. Methodology: The variables considered in this paper are corporate governance conceptualized as an independent variable and anchored on agency theory, top management capabilities as the intervening variable, anchored on upper echelon theory and performance as the dependent variable. The study used a descriptive research design and a positivist worldview. With the aid of key informants from these corporations, a semi-structured questionnaire was administered to 47 commercial state corporations. The data was analyzed using descriptive and inferential statistics, notably Pearson's Product Moment Correlation and regression analysis for hypotheses and other statistical tests. Findings: The study discovered that top management capabilities positively and statistically intervene the relationship between corporate governance and performance. Unique Contribution to Theory, Practice and Policy: The results support assertions of the agency theory that corporate governance is key for organisations that need to achieve superior competitiveness over the long-term and thus outperform rival firms. Stewardship theory (ST), upper echelon theory (UET) and resource dependency theory were applied to expound the empirical connections, hence expanding knowledge of the subject under investigation. Policymakers can utilise the findings to develop favourable technology policies and robust regulatory frameworks to manage competition. Therefore, commercial state corporations must take a keen interest in scanning the market for emerging technologies in the country. The findings enriched the subject matter by reducing the three gaps that were identified by the study first, the constructs of interest; corporate governance, macro environment and top management capabilities to performance had not been studied in the commercial state corporations in Kenya.