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EFFECTS OF CORPORATE GOVERNANCE PRACTICES ON INVESTMENT DECISIONS OF LARGE, RETAIL CHAINS IN KENYA

The present economic condition has endured for far too long, and as a result, consumers have every right to expect better results from retail companies. This ought to happen as a consequence of retail chains addressing the causes of bad financial choices and, on occasion, retail chain collapse. These factors include unethical and unprofessional practices, as well as poor management quality. Recent events, like as the financial crisis that hit supermarkets, have brought to light the need of strong corporate governance in ensuring the continued growth and prosperity of firms and the economy as a whole over the long term. This crisis made it abundantly clear that even robust economies, especially those lacking in transparent governance, accountable corporate boards, and shareholder rights, are susceptible to rapid collapse in the event that investors lose faith in the market. Therefore, the issue that has to be answered is how the various aspects of corporate governance effect performance. Therefore, the objective of this research was to determine the extent to which corporate governance procedures have an impact on the investment choices made by significant retail chains that have been operating in Kenya for at least five years. The resource dependence theory, the stewardship theory, and the agency theory served as the foundation for this investigation. The study was carried out using a survey format. The study gathered information and data with the purpose of determining the influence that corporate governance standards have on investment choices made by big retail businesses. All of the big supermarkets that have been in business in Nairobi City County, Kenya for at least five years constituted the study's population. The investigator focused their attention on seven grocery stores that the CAK classifies as being big. Five (5) respondents were selected at random from each grocery store, for a total of thirty-five (35) respondents. To gather primary data, we conducted in-depth interviews, while to compile secondary data, we scoured business websites and internal corporate documents. The analysis of the data was conducted so that significance could be drawn between the study's aims, hypotheses, and findings. Using evidence evaluation, classification, tabulation, and recombination, this was completed. The presented quantitative data was shown using tabulations, bar graphs, and pie charts. Simple and complex linear regressions were performed as part of the study of regression. In each of these cases, the regression was carried out at a different level. The results suggest that corporate governance policies significantly affect the investment decisions of large retail chains. While large supermarkets and chain shops may not implement every possible corporate governance practice, they do have key committees like the governance committee, which meets at least annually to study and report on all matters related to corporate governance. Large grocery shops and retail chains may not implement all of the available corporate governance standards, but it doesn't stop this group from meeting regularly anyhow. The researcher suggests that management should keep and grow a board that is responsible, innovative, and imaginative in addition to one that is more appropriately chosen and operated since transparency is one of the most crucial indications for examining investment selections. Directors should never conduct formal reviews of their own acts, the company, or individual directors; rules for the mandatory retirement age for directors should originate from the highest level of management, and these requirements should be unambiguous.

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Author: nkaiwuatei, vincent k
Contributed by: zemuhindi
Institution: university of nairobi
Level: university
Sublevel: post-graduate
Type: dissertations