International Journal of Research and Innovation in Social Science (IJRISS) |Volume IV, Issue VII, July 2020|ISSN 2454-6186 www.rsisinternational.org Page 232 Board Behavior and Corporate Performance: A Case of African Guarantee Fund for Small and Medium- Sized Enterprises Nicole Mueni Muia, Julius Kahuthia Mwangi, John Muhoho Department of Business Studies, St Paul’s University Abstract:- The main purpose of this study was to examine effect of corporate governance on the performance of credit guarantee schemes. The study was guided by the following objectives; to determine effect of board behavior and the performance of credit guarantee schemes. The study was guided by the stewardship theory. The study employed descriptive research design. The target population was 40 staff working at AGF. Census survey was adopted while primary data was used which was collected using questionnaires. The validity and reliability of the data collection instruments was ascertained through pretesting. Descriptive statistics like frequencies and percentages was used to summarize data while inferential statistics such as correlation coefficients was used to test the non-causal relationship between variables while regression analysis was used to test the research hypotheses at 5% significance level with the aid of SPSS version 25. The results were presented using tables and discussion there- off. The research findings indicate that there exist a statistically significant positive relationship between board behavior and the performance of credit guarantee schemes. Key words: board behavior, performance, corporate governance, credit guarantee schemes, stewardship I. INTRODUCTION t is important to highlight the definition of corporate governance to understand it at its entirety. Berger, Imbierowcz and Rauch (2016) ascertain that good corporate governance practices will result to a great significance in the improvement of the performance of companies. Corporate Governance is concerned with structures, actions or mechanisms in which the management of a company is held responsible by the stakeholders that have stake in the business. Corporate governance provides structures intended to ensure that the right questions are asked, with checks and balances put in place to reflect what is best for the creation of long-term sustainable value of the firm Monks and Minow(2004). Sharma (2015) asserts that corporate governance is putting in place an arrangement, devices and measures that will ensure that the company is focused on maintaining the shareholder value through the role of their managers. Gupta and Sharma (2014) argue that good corporate governance practices will ultimately result to a better share performance and will make it easier for the company to acquire new capital through other investments. Good corporate governance is crucial for every business success, as a well-governed company is more lucrative for potential investors Krivogorsky (2006), Chen, Chen & Wei (2009). Good governance is also known to lower the cost of capital for firms by mitigating agency problems Chen et al., (2009). In the wake of various corporate scandals, debate on business ethics has been on the rise; more so with the historic failures of giant corporations such as Enron, WorldCom and Parmalat, largely due to corporate governance issues West(2009). The aim of corporate governance is to enhance board commitment in the management of firms and sustainable long-term value for all shareholders. However continuous debates among corporate governance researchers since inception has brought conflicting arguments on how to best define measures of good governance mechanisms that will lead to financial efficiency, social legitimacy and goal attainment of the firm Judge (2010). Various researchers in corporate governance have applied different theories that have given rise to different arguments and interpretations Keasey et al(2005), hence the multi- theoretical character of corporate governance. However, modern research on corporate governance has focused on some key theoretical frameworks in management studies such as; the theory of agencies Jensen and Meckling (1976), Stakeholder Theory, Freeman (1984), Modern Theory of Institutions Meyer and Rowan (1977), Zucker (1977), Meyer and Scott (1983), resource dependency theory Pfeffer and Salancik (1978), transaction cost theory Williamson (1981) and the stewardship theory Donaldson and Davis (1991). While the theory of virtue ethics, the theory of feminist ethics, the theory of discourse ethics, postmodern theory of ethics, and the theory of business ethics, are other theories closely associated to corporate governance from ethical research Valentine et al (2009). For the purpose of this study, corporate governance is defined as a set of mechanisms that Outline the powers, influence management decisions that "manage" the behavior and limit managers' discretionary space Charreaux(1996). This study analyzed the structure of ownership, Board conduct and CEO tenure as independent variables. Ownership structure is the identity of ownership of a company (Thomsen, 2000) and is considered the hard core of corporate governance; which consists of owners of a company who share two formal rights: the right to control the company and the right to appropriate I