CORPORATE GOVERNANCE, ETHICS, SIZE, RETAINED EARNINGS AND DEBTS: THEIR RELATIONSHIP WITH SHAREHOLDER VALUE OF FIRMS IN NAIROBI SECURITIES EXCHANGE

  • Suleiman Guyo Roba School of Business and Economics, Kenya Methodist University
  • Wilson Muema School of Business and Economics, Kenya Methodist University
  • Dr Ken Mugambi School of Business and Economics, Kenya Methodist University
Keywords: Governance, ethics, retained earnings, Corporate Size, EPS, NSE

Abstract

Traditionally, Corporations exist primarily to maximize shareholders wealth (Berle & Means,1932; Kapoor,2006; Stout, 2012; Friedman, 1962).The struggle for Corporations to maximize profits have taken centre stage in recent years. This has led to increased use by Corporations of various practices to meet the pectations of variousstakeholders/shareholders. This study investigates the relationship between corporate ethics, governance, retained earnings, debts and sizes and shareholder value (EPS) of firms listed on NSE. The results of the study should assist Corporate CEOs andExecutives make informed use of the Corporate Practices in furthering corporateobjectives. A Survey of staffs of 33 Kenyan Firms listed on NSE revealed that there is significant correlation between these practices and the EPS of the Companies. In addition the study revealed that higher ratings on governance and ethical practices promote
efficiency of operations among firms hence increased EPS. Increased adoption of retained earnings and debts to finance investments portrayed increased effects on EPS of the firms. The findings further revealed that corporate size have no significant influence on the EPS of the firms. Adoption of these practices can be an appropriate strategy towards maximization of corporate returns; hence shareholder value of firms. Corporate Managers, CEOs and Executives should, however, carefully evaluate corporate strategies/practices they employ against other forces including market characteristics and nature of companyproducts/services. 

Author Biographies

Suleiman Guyo Roba, School of Business and Economics, Kenya Methodist University

Department of Accounting and Finance

School of Business and Economics

Wilson Muema, School of Business and Economics, Kenya Methodist University

authors

School of Business and Economics

Dr Ken Mugambi, School of Business and Economics, Kenya Methodist University

authors

School of Business and Economics

Published
2017-08-31