GOVERNANCE QUALITY, INVESTMENT STRATEGY, AND PENSION FUNDING ADEQUACY IN KENYA: AN EMPIRICAL ANALYSIS

This study assessed the influence of corporate governance and investment strategy on the financial performance of pension funds in Kenya over the period 2012–2022. The study used a mixed-methods approach, combining qualitative and quantitative designs, using primary survey data and secondary pension performance data. Corporate governance and investment strategy were measured through survey-based indices, while pension fund performance was assessed using financial return indicators. A multi-equation analytical framework was applied to examine direct, mediating and joint effects.

The results reveal that corporate governance practices have a significant positive effect on pension fund performance. Investment strategy plays a critical mediating role, enhancing the effectiveness of governance practices in improving financial outcomes. The study concludes that pension fund performance in Kenya is jointly determined by governance quality and investment strategies, underscoring their importance for fund managers, regulators, and policymakers in promoting sustainable retirement income security.

JEL: G23 – Non-bank Financial Institutions; Institutional Investors (including pension funds); G34 – Mergers; Acquisitions; Corporate Governance; G11 – Portfolio Choice; Investment Decisions; G28 – Government Policy and Regulation; C33 – Panel Data Models; Longitudinal Data; C83 – Survey Methods; Sampling Methods; J32 – Private Pensions

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