INFLUENCE OF ETHNIC DIVERSITY OF THE BOARD OF DIRECTORS ON FIRM’S CAPITAL STRUCTURE AMONG LISTED FIRMS IN NAIROBI SECURITIES EXCHANGE, KENYA

Autors/ores

  • Kennedy Ntabo Otiso Associate Professor of Marketing, Department of Business Administration and Management Science, School of Business, Koitaleel Samoei University College, Kenya
  • Nahashon Koech Head of Internal Audit, Koitaleel Samoei University College, Kenya

DOI:

https://doi.org/10.46827/ejefr.v9i2.1978

Paraules clau:

capital structure, board diversity, ethnic diversity, corporate governance, securities exchange

Resum

Capital structure decisions are important because they influence the performance of firms. Researchers posit that the new diverse boards are critical in exercising strategic control, tougher monitoring and financial decision making. The specific objective of the study is to examine the effect of the ethnic diversity of the board of directors on a firm’s capital structure. The study adopted a longitudinal design. The study utilized a census technique for 34 firms that are listed on the Nairobi Securities Exchange (NSE) consistently for an 8-year period, 2004–2012, hence giving 272 years of observations. This study utilized secondary data. A documentary guide was used to collect data. Data was analyzed using both descriptive statistical methods, which included mean, standard deviation and inferential statistics to test the linear relationship between variables and multiple regression to test the hypothesis. The study found that ethnic diversity (β3= -0.188, ρ<0.05) of board directors negatively affects capital structure. The study concluded that board diversity was an important determinant of capital structure. Therefore, there was a need to diversify the board of directors in terms of ethnicity and nationality so as to effectively monitor management from adopting excessive leverage. In order to add valuable and diverse expertise that domestic members do not possess, there was a need to enhance national diversity.

 

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Biografia de l'autor/a

  • Kennedy Ntabo Otiso, Associate Professor of Marketing, Department of Business Administration and Management Science, School of Business, Koitaleel Samoei University College, Kenya

    Professor Kennedy Ntabo Otiso (D.Phil.) is an Associate Professor of Marketing at Koitaleel Samoei University College, a constituent college of the University of Nairobi. He holds a Doctor of Philosophy and a Master’s degree in Business Management (Marketing Option) from Moi University, and a Bachelor’s degree in Business Administration-Marketing Option (Cum Laude) from the University of Eastern Africa, Baraton. With over 17 years of experience in academia and consultancy, Professor Otiso has served in various academic, administrative, and leadership roles, including as Head of Department, Program Leader, and University Senate Member. His scholarly work includes over 60 peer-reviewed journal publications, authorship of an academic book, and supervision over 27 master’s and PhD students. He has also contributed to multiple international conferences across Africa, held adjunct teaching positions at several universities, and acted as an external examiner for institutions like Alupe, Kaimosi Friends, Bomet, and Kibabii universities amongst others. He has held governance roles such as Director at Consolidated Bank of Kenya and Board Member at several educational institutions. He has successfully attended and attained certification of good performance in the senior management course (SMC) offered by the Kenya School of Government. He is a member of the Marketing Society of Kenya, Institute of Internal Auditors, and Utafiti Foundation, he is also a certified trustee under the Retirement Benefits Authority. His consultancy and project work include curriculum development, USAID-funded research, and educational program expansion. A seasoned public speaker and peer reviewer, Professor Otiso has received numerous recognitions and awards for his contributions to education, leadership, and community service.

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Descàrregues

Publicat

2025-06-26

Número

Vol. 9 Núm. 2 (2025)

Secció

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