Abstract:
The main motivation of the study was to determine the influence of corporate
governance practices on working capital efficiency of manufacturing firms in Nairobi
County. The study used descriptive survey research design. The population of the
study comprised of all five hundred and fifty four manufacturing firms registered in
trade and Industries Ministry of the Nairobi County. The sample size was one hundred
and eleven firms. The study used questionnaires, interview guide and documentary
analysis as the data collection instruments. The statistical package for social science
(SPSS) was used to analyses the data. Correlation analysis was used to test the
relationship between the variables. The Corporate Governance practices were
measured by Board Structures, internal Audit and shareholders‟ Interest. The results
of the study indicated that 87.2% of the variations in the working capital efficiency
are related to Board structures, internal audit and the Shareholders interest. The
coefficient of variations was found to be .756. This shows that there is a positive
correlation between the Board structures, Internal Audit, Shareholders interest and the
working capital efficiency. This indicates that the changes in the predictor variables
would be very closely associated with the changes in the level of working capital
efficiency. The study found that board structure has the highest influence on working
capital efficiency than internal audit and shareholders‟ interest The study concluded
that there is a significant impact of corporate governance on working capital
efficiency of manufacturing firms in Nairobi County. The study recommends that
there is need for harmonization of corporate governance across all manufacturing
firms since some of them had different nature of corporate governance practices and
therefore leading to the difference in the management of working capital.
