Board Characteristics and Capital Structure Decisions of Commercial Banks in Kenya

Organizations in the modern society are faced with numerous challenges that require those charge governance to make effective decisions enhance organizations’ overall performance and sustainability. One of key an organization’s board ought involve capital structure. Despite various research have been conducted relating characteristics structure, several authors concurs manner which banks select best factors influence their corporate financing behavior not well understood. The main aim this study therefore was investigate structure commercial Kenya. measured respect size, diversity, independence expertise while gauged ratio, is, total debt ratio. These dimensions also formed specific objectives study. assessed literatures covering both theoretical empirical elaborates on variables providing more insight as identified gaps needed be filled. employed correlation design it strived demonstrate causative connection between variables. All selected target population chief finance officers internal auditors being respondents these banks. primary source information secondary data whereby collection instrument questionnaire whose reliability validity ensured before collecting data. Collected properly checked conducting final analysis. Data analyzed using descriptive inferential analysis, aided by statistical package for social science outputs were presented form graphs, pie charts, frequency tables narrations. findings showed a strong positive all measures shown R value 0.824. From analysis findings, concludes directors’ studied had significant regression coefficients p-values 0.000, 0.002 0.001 consecutively less than 0.05 indicating relationship decisions; therefore, null hypotheses rejected. established Kenya over period 5 years 2013 2017 averaged at 0.841 1.00, assets equity opposed debts. As result, concluded impact made Kenyan Furthermore, regard financial flexibility important tax shelter advantage, implying aversion proclivity follow inverted pecking order when comes external funds. recommends banks’ management should manage levels rationally performance; right size mix diversity who will able monitor but interfere or infringe increase benefit from skills expatriates members; finally selection divergent qualifications so can reap heterogeneity educational backgrounds competences.