The Relationship between Board Remuneration and Financial Performance among Listed Financial Services Companies in Kenya

A presentation during the EAMARC 2 conference at USIU-Africa in November 2015.“You get the board you pay for”. This means that to attract, retain the best directors, the board must offer attractive packages. However, corporate governance failures and corporate collapses have increased concern over the increasing levels of board remuneration. The 2008-09 financial crisis raised serious questions about the role of Corporate Governance mechanisms in determining remuneration and incentive systems. High levels of director’s remuneration may be caused by greed in executive management or weak governance by shareholders. In collusion with management, directors can also turn a blind eye to accounting irregularities and corporate losses, which threaten the long term growth and survival of the company. With conflicting findings in empirical literature, recent cases of corporate governance failures in Kenya, and the paucity of research on the phenomenon in Kenya, there was a need to investigate the relationship between board remuneration and financial performance