Corporate Governance Challenge to Regulation Compliance by Deposit Taking Savings and Credit Co-Operative Societies in Kenya

The aim of the study was to investigate the challenges to regulation compliance by Deposit Taking Savings and Credit Co-operative Societies (D.T.S) in Kenya. Further, since the D.T.S are ranked according to size, the study analysed the compliance level in these groupings. The objective was to establish the relationship between corporate governance and regulation compliance, and whether SACCO size moderated this relationship. The study recommends that SACCOs should separate the Board’s role from that of the Chief Executive Officer. SACCOs should also educate members to empower them in vetting/voting in professional directors and provide continuous board training in corporate governance. Furthermore SACCOs should consider engaging only in their core business of saving and lending. In addition, SACCOs need to enhance professional management and transparency in their recruitment process. Lastly the study recommends that SACCOs set minimum qualifications for their board members. A sample of 139 respondents was selected using stratified random sampling but only 108 respondents were interviewed using the questionnaire method. The major finding from the study was that there is a relationship between corporate governance and regulation compliance. The study further established that while corporate governance influences regulation compliance, SACCO size has a significant moderating influence in this relationship.