Composition and Financial Performance of Farmers' Cooperative Societies in Kericho County, Kenya

Abstract

The main focus of this study was to analyse the relationship between board composition and the financial performance of farmers' cooperative societies in Kericho County, Kenya. The study was based on the Stakeholder Theory and adopted a correlational research design. The target population consisted of accounting officers, auditors, chief executive officers, directors, managers, and employees from the 51 farmers' cooperative societies registered by the Ministry of Cooperatives in Kericho County. A sample size of 303 participants was determined through Yamane's (1967) formula. Data was collected using a structured questionnaire, and subject experts were consulted to enhance the validity of the research instrument. The instrument's reliability was measured using Cronbach's alpha coefficient, which yielded a result of 0.8999, indicating sufficient reliability for the study. A pilot study was conducted in Bomet County, using 10% of the sample size to evaluate the research instrument's validity. The data from the study was analysed using descriptive statistics, that is, mean and standard deviation, and inferential statistics using correlation and multiple regressions. The results were presented using frequency tables. The study found that board composition was statistically significant (Beta=0.431; p=0.000<0.055) and positively influenced the financial performance of farmers' cooperative societies. Overall, the study concluded that board composition had a positive statistically significant relationship with the financial performance of the farmer cooperative societies. The findings from this study could be used to improve the delivery of services to farmers by cooperative society management. It can also help policymakers, such as the government and other stakeholders, make informed decisions and policies to enhance the performance of cooperative societies across the country. Finally, the study's findings will benefit researchers interested in studying the relationship between board composition and the financial performance of farmers' cooperative societies.