Effect of Stakeholder Engagement on the Financial Performance of SDA Church Ventures in Kenya

Abstract

ABSTRACT

Effective corporate governance remains a critical determinant of organizational sustainability, particularly within faith-based institutions that depend heavily on stakeholder trust, voluntary contributions, and institutional legitimacy. Ventures affiliated with the Seventh-day Adventist Church in Kenya continue to experience financial instability characterized by liquidity constraints, operational inefficiencies, and declining donor confidence despite their strategic intent to promote institutional self-reliance. This study examined the effect of stakeholder engagement on the financial performance of SDA Church ventures while assessing the moderating role of intellectual capital in the governance performance relationship. Guided by agency and stewardship theories, the study adopted a quantitative cross-sectional research design. Data were collected from 97 respondents across ten SDA-affiliated institutions, including hospitals and educational organizations, using structured questionnaires. Correlation analysis revealed a moderate positive relationship between stakeholder engagement and financial performance (r = .477, p < .01), while regression analysis indicated that stakeholder engagement explained 22.7% of the variance in financial performance when considered independently (? = .538, p < .05). However, within the comprehensive governance model, stakeholder engagement did not exhibit a statistically significant direct effect, suggesting indirect influence pathways. The findings indicate that stakeholder engagement contributes to financial sustainability primarily through relational capital, knowledge sharing, and institutional trust rather than immediate financial outcomes. The study provides empirical evidence on governance dynamics in faith-based organizations and highlights the importance of intellectual capital in enhancing governance effectiveness.

Keywords: Stakeholder Engagement, Financial Performance, Corporate Governance, Faith-Based Organizations, Intellectual Capital, Kenya