AUDIT COMMITTEE ATTRIBUTES AND CORPORATE GOVERNANCE IN STATE CORPORATIONS UNDER THE NATIONAL TREASURY IN KENYA
Rhodah Chepngetich - Student, School Business, Economics and Tourism, Kenyatta University, Kenya
Dr. Salome Musau - Lecturer, School of Business, Economics and Tourism, Kenyatta University, Kenya
ABSTRACT
The role of state corporations in national economies is pivotal, given their mandate to implement government policy, provide essential services, and drive socio-economic development. In Kenya, state corporations under the National Treasury have historically faced scrutiny over governance failures, marked by rising complaints of administrative malpractice and corruption. Despite the establishment of corporate governance frameworks such as the Mwongozo Code and the formation of audit committees intended to enhance oversight, concerns over political interference, weak supervision, and inadequate financial management structures persist. This study sought to analyze the effects of audit committee attributes on corporate governance among state corporations overseen by the National Treasury. The target population comprised 136 respondents from 34 public institutions under the National Treasury. Due to the relatively small population, the study employed a census approach, ensuring that all 136 respondents within these corporations participated. Data were primarily collected using a structured questionnaire. Quantitative data analysis involved statistical methods, including the calculation of means and standard deviations, while qualitative data was analyzed thematically and descriptively. Additionally, an empirical analysis was conducted to assess the effects of audit committee attributes on the governance of state-owned enterprises. The data were subjected to heteroscedasticity, multicollinearity, and normality tests to validate the reliability of the multiple regression model. The analysis showed that all four audit committee attributes had significant positive effects on corporate governance. Audit committee independence enhanced objectivity and accountability; committee size contributed to workload distribution and governance coverage; diversity promoted inclusive and balanced decision-making; and expertise had the greatest impact, enabling informed oversight and risk management. The study concluded that audit committee attributes are critical determinants of good governance in state corporations. It recommends strengthening appointment policies to preserve independence, ensuring optimal committee size, promoting diversity, and enhancing technical capacity through professional development. These findings contribute to the discourse on public sector governance reform and offer practical insights for policy implementation. Further research is encouraged to explore contextual moderators influencing effectiveness of the committee such as institutional culture and regulatory environments.