TY - JOUR
T1 - Analysing corporate governance and accountability practices from an African neo-patrimonialism perspective
T2 - Insights from Kenya
AU - Kimani, Danson
AU - Ullah, Subhan
AU - Kodwani, Devendra
AU - Akhtar, Pervaiz
PY - 2021/7
Y1 - 2021/7
N2 - This paper examines corporate governance (CG) and corporate accountability practices in the African context, by focusing on the case of Kenya. Our data comprises a combination of 29 semi-structured interviews, field observations and archival evidence. We reveal how western-originated CG and accountability reforms are constrained or subverted by a vigorous neo-patrimonial regime. The Kenyan corporate sector has well defined legal-rational structures, including an elaborate corporate sector regulatory framework, professionals (i.e. accountants and auditors) and corporate boards. In contrast, however, informal networks and patronage interfere with the nomination and work of non-executive board members, thereby hindering the possibility of an independent monitoring of executive management. A conflictual and inadequately resourced regulatory framework plays a more symbolic than an effective regulative role in enforcing CG and accountability practices. We also find a widespread rent-seeking culture that significantly hinders the exercise of corporate accountability. Furthermore, external auditor independence is problematic due to conflicts of interest and the auditors’ dependence on advisory fees, thereby favouring a clientelist association with auditee firms. Overall, our findings reveal that CG and accountability practices, while ostensibly present in Kenya, are largely ineffective due to the influence of neo-patrimonial realities on the mind-set and actions of corporate actors.
AB - This paper examines corporate governance (CG) and corporate accountability practices in the African context, by focusing on the case of Kenya. Our data comprises a combination of 29 semi-structured interviews, field observations and archival evidence. We reveal how western-originated CG and accountability reforms are constrained or subverted by a vigorous neo-patrimonial regime. The Kenyan corporate sector has well defined legal-rational structures, including an elaborate corporate sector regulatory framework, professionals (i.e. accountants and auditors) and corporate boards. In contrast, however, informal networks and patronage interfere with the nomination and work of non-executive board members, thereby hindering the possibility of an independent monitoring of executive management. A conflictual and inadequately resourced regulatory framework plays a more symbolic than an effective regulative role in enforcing CG and accountability practices. We also find a widespread rent-seeking culture that significantly hinders the exercise of corporate accountability. Furthermore, external auditor independence is problematic due to conflicts of interest and the auditors’ dependence on advisory fees, thereby favouring a clientelist association with auditee firms. Overall, our findings reveal that CG and accountability practices, while ostensibly present in Kenya, are largely ineffective due to the influence of neo-patrimonial realities on the mind-set and actions of corporate actors.
KW - Accounting
KW - Africa, less developed countries
KW - Corporate governance
KW - Financial transparency
KW - Neo-patrimonialism
UR - http://www.scopus.com/inward/record.url?scp=85096550612&partnerID=8YFLogxK
U2 - 10.1016/j.cpa.2020.102260
DO - 10.1016/j.cpa.2020.102260
M3 - Article
AN - SCOPUS:85096550612
SN - 1045-2354
VL - 78
JO - Critical Perspectives on Accounting
JF - Critical Perspectives on Accounting
M1 - 102260
ER -