Influence of Governance Factors on Performance of Firms Listed at Nairobi Securities Exchange, Kenya

This study examined how governance factors influence the performance of firms listed on the Nairobi Securities Exchange. Adopting a positivist philosophy, it used both descriptive and explanatory research designs. The analysis focused on 61 listed firms, with heads of finance, marketing, HR, internal audit, customer relations, operations, ICT, and risk and compliance as the units of observation. The target population comprised 350 departmental heads, from which a sample of 187 respondents was selected using purposive and stratified random sampling, achieving a 97% response rate. Data collection involved semi-structured questionnaires for primary data and extraction checklists for secondary data. Qualitative data was analyzed thematically, while quantitative data was analyzed using descriptive statistics such as frequencies and percentages, and inferential statistics, including logistic regression. The Nagelkerke Pseudo R² indicated that governance factors explained 60.2% of the variance in firm performance (R² = .602), and the regression coefficient showed that governance factors significantly predicted performance (B = 3.072, p ≤ .05). The study concludes that firm performance—measured by financial outcomes, customer satisfaction, internal processes, and learning and growth—can be enhanced through the adoption of governance (ESG) practices. This study recommends that management of NSE-listed firms integrate governance practices into their core operations to improve overall performance.