The governance of enterprises in Kenya operates within a complex framework of structural constraints, including regulatory burdens, access to finance limitations, and infrastructural deficits. These constraints significantly influence firm competitiveness and sustainable growth, yet a comprehensive policy analysis spanning recent decades is lacking. This article analyses the evolution of enterprise governance policy and its impact on business competitiveness. It aims to identify persistent structural constraints, evaluate the efficacy of major policy interventions, and propose a refined framework for future governance reform. The policy analysis employs a mixed-methods approach, combining a systematic review of policy documents and legislative frameworks with a thematic analysis of stakeholder interviews and secondary data on business environment indicators. A dominant theme was the misalignment between formal regulatory reforms and their implementation, creating a compliance gap that disproportionately burdens small and medium-sized enterprises. Specifically, despite liberalisation efforts, access to formal credit remained a critical constraint, with over 60% of surveyed SMEs citing it as a primary growth obstacle. Policy efforts have been incremental and have not sufficiently addressed the systemic nature of the constraints. Effective enterprise competitiveness requires an integrated policy approach that synchronises regulatory design, enforcement capacity, and support mechanisms. Policymakers should prioritise the consolidation and digitalisation of regulatory processes to reduce compliance costs. Furthermore, a tiered governance framework, proportionate to enterprise size and sector, should be developed to enhance policy relevance and effectiveness. enterprise governance, structural constraints, competitiveness, policy analysis, business environment, regulatory reform This analysis provides a novel synthesis of long-term policy trajectory and ground-level business constraints, introducing the concept of the 'compliance gap' as a critical mechanism undermining governance reforms.
Bett et al. (2019) studied this question.