The purpose of this paper was to examine the relationship between board composition and financial distress of listed firms in Kenya. The study specifically sought to determine the effect of board size, board independence, board tenure, multiple directorship and financial expertise on financial distress. The research design used in this study was exploratory design. The study employed panel regression analysis and simultaneously used pooled regression and random effects on sample size of 39 listed firms in Kenya during the period of 2004-2013. The study found that board independence is negatively and significantly related with financial distress ?=-0.044; p<0.05) while board tenure was found to be positively and significantly related to financial distress (?=0.059; p<0.01). This study adds value to theory by not only studying board attributes but by empirically analyzing the extent of relationship between board composition and financial distress. The paper fills an important gap in academic literature by providing insights into the role of board composition in financial distress particularly in developing economies. This study complements other studies focusing in China and Middle East. In addition given the increasing collapsing of companies in developing nations, this paper provides policy makers with evidence on the implications of board composition on financial distress.
JEL classification numbers: G2, G3
Keywords: Board Composition, Financial distress, board size, board tenure, multiple directorships, financial expertise