Shareholder Rights and Organizational Performance of Commercial Banks in Kisumu County, Kenya

Commercial banks operate under governance arrangements in which shareholder participation, access to information, voting rights, and protection of ownership interests can influence accountability and strategic oversight. This study examined the association between shareholder rights and organisational performance among commercial banks in Kisumu County, Kenya. A descriptive cross-sectional survey design was used. The target population comprised 536 top- and middle-level managers across 67 branches of 26 commercial banks, and 224 managers were selected using stratified sampling. Of the 224 questionnaires distributed, 194 were returned, yielding an 86.6% response rate. A structured questionnaire was used to measure shareholder rights and survey-based organisational performance. A pilot study with 22 managers from seven commercial bank branches in Kakamega County was used to refine the instrument. Descriptive statistics, Pearson correlation, and multiple regression were applied. Shareholder rights were positively associated with organisational performance (r = .362, p < .001). In a multivariable model adjusting for board composition, board size, and transparency, shareholder rights retained a positive association with organisational performance (B = .211, SE = .098, standardised Beta = .192, p = .033). The full model was statistically significant, F(4, 189) = 16.72, p < .001, and explained 26.1% of the variance in organisational performance (R2 = .261). The findings support a cautious conclusion that stronger shareholder-rights practices are associated with better perceived organisational performance, while the cross-sectional design does not establish causality. Banks should therefore strengthen transparent participation mechanisms, equitable treatment of shareholders, and timely access to corporate information while continuing to evaluate governance outcomes using objective performance indicators.