Effect Of Risk Management Practiceson Financial Performance Of Commercial State Corporations In Kenya: A Case Of Jomo Kenyatta Foundation

Purpose: Risk if not well managed could lead to dissatisfactory performance of most organizations. Risk management should be at the central part of an organization's operations by integrating risk management practices into Systems, processes, and culture of the entire organization. This study sought to establish the effect of Risk management practices on financial performance of Commercial state corporations in Kenya, a case of JKF. Methodology: The study adopted a descriptive study. The total population of the study was the employees of JKF. According to 2014/2015 Kenya National Audit office report, there are 119 employees of JKF. The study used secondary data which was collected from published reports and audited financial statements for five years for periods between 2011 and 2016. The collected data was analyzed using descriptive and inferential statistics. The study adopted regression analysis and statistical significance was measured at the 5% level of significance. R2 was used to determine strength of the relationship of the variables under study. Results: The study found significant relationships between financial performance of commercial state corporations and operational, financial and strategic risk management practices to an extent of 98.7%, 92.7% and 87.4% respectively. The findings indicate that there is a fairly strong positive relationship between reputational risk management practices and financial performance to an extent of 56.2%. Efficient management of operational risks leads to lower operating expense and increased profitability. Practices that lead to general reduction of liabilities would positively affect firm's financial performance. Unique contribution to Theory, Practice and Policy: The study recommended that state corporations should comprehensively implement risk management good practices as outlined in their "MWONGOZO" guidelines. Further it was recommended that future studies should be carried out to include all state corporations based on data from a longer duration.