Good corporate governance practices enhance the ethical behavior of those yielding corporate powers by monitoring managers to ensure that they behave in accordance with the aspirations of the wider stakeholders of entities. This culminates in overall firm financial performance and health business dealings. The insurance companies in Kenya have been reporting poor financial performance results as evidence by the collapse of several insurance companies in the recent past, such as the Invesco insurance company. The collapse of these insurance companies can be attributed to poor corporate governance practices. The main objective of the study was to investigate the effect of board diversity on the financial performance of insurance companies in Kenya. The stakeholders’ theory, was used in supporting this study. This research study adopted the descriptive research design. The stratified random sampling technique was employed in determining the sample size for this study, thus resulting into having a sample size of 211 employees. The primary data for this study was collected using questionnaires whereas the secondary data was collected using data observation schedules/collection sheets. The p values of .001from the regression model which was less than 0.05, confirmed that board diversity has a significant positive effect on the financial performance of insurance companies in Kenya. The research therefore recommends that the insurance companies in Kenya should embrace board diversity, because it has a positive significant effect on their financial performance. Keywords: Bard Diversity, Financial Performance, Insurance Companies, Corporate governance practices
John Ogwang (Tue,) studied this question.