The Intervening Influence of Internal Controls on the Relationship Between Board Practices and Performance of Government Owned Entities in Kenya

Abstract

There is a growing public debate on the role of boards in government-owned entities due to poor performance, corporate scandals, and increased corruption. Good board practices and internal controls, including enterprise risk management, are crucial for enhancing performance. Research findings on their impact have been contradictory. However, improving transparency, accountability, and adherence to governance frameworks can positively influence performance. Addressing governance issues is crucial to mitigate resource mismanagement and corruption, leading to better overall performance. The objective was to determine relationships among board practices, internal controls, and government-owned entities’ performance. Data was collected from 153 properly completed questionnaires out of the 157 returned, representing 65.38% of the entire population of 234 government-owned entities. The findings established that internal controls positively and significantly intervened in the relationship between board practices and performance. Implementing good board practices and internal controls promotes accountability and transparency, leading to enhanced organizational performance. Government-owned entities should prioritize implementing effective board practices and internal controls to enhance their overall performance.