Corporate governance reforms are essential in in proving performance in both private and public sectors. When implemented effectively, it can avert corporate scandals, fraud, and criminal liability and enhance an organizations reputation. The August 2010 constitution of Kenya provided for devolution of power through the establishment of County governments in March 2013. Consequently, some functions that had been under the national government such as agriculture, water, mining and the health sector were devolved. Devolution of the health sector meant management functions which included, planning, budgeting and financial management, human resources, tendering and provision of medical supplies fell under the County governments. To improve performance and delivery of health care services, the County government of Embu instituted corporate governance reforms in Embu Level Five Hospital. This study generally focused on the effects of implementation of corporate governance reforms on delivery of health care services in Embu Level Five Hospital. This study explored the independence and autonomy of the appointed board of directors, examined conflict of interest between appointed management and the board of directors and assessed effects of implementation of corporate governance procedures on service delivery in Embu Level Five Hospital. This study was anchored on two complementary theories namely; the agency and the stewardship theories. The agency theory explained the pursuance of self-interests by managers who have been trusted by the principals to run organizations. The stewardship theory argued that performance can be enhanced if managers truly identify with the goals of the organization. A total of 380 respondents were selected for field interviews. Questionnaires were distributed to 360 residents randomly selected of Embu County who included men, women and the youth. Interview schedules were administered to 20 purposively selected respondents who include; members of the board, management and medical personnel in Embu Level Five Hospital, personnel from County health sector, politicians from the county and experts in corporate governance. Data collected was analyzed and interpreted quantitatively and qualitatively. Findings from the study indicated that although the adoption of corporate governance procedures in Embu Level Five Hospital has translated to improvement of the delivery of health care services to patients there still exist challenges of lack of an independent and autonomous board of directors and the existence of conflict of interest among managers entrusted with the running of the hospital.
Key word: Corporate Governance, Political Patronage, Conflict of Interest