Abstract:
The upper Echelons Theory reiterates the importance of top management in an organization and
recognizes that the mangers make decisions that grow the entity. Before the establishment of this
theory, the premise was that larger firms which drive high amounts of income, are capable of running
themselves without failure. Although Organizations that command large amounts of income are deemed
to be successful the upper echelons theory holds that these entities cannot be successful without proper
management and guidance by top management where the board of directors in this case is considered
as top management organ for SACCOs. Savings and Credit Cooperatives (SACCOs) require good
governance to avoid the experience of financial distress. The current research was therefore aimed at
establishing the influence of firm revenue on the relationship between board characteristics and financial
distress of deposit taking SACCOs in Nairobi County. Large entities command more revenue as
compared to small firms. Board Characteristics is of importance to this study because it influences
Corporate Governance which according to previous research has shown that the practice helps
revolutionize performance of various institutions. The study is guided by upper echelons theory which
reiterates the importance of top management. Descriptive research design was adopted while Nairobi
County was purposively chosen and a census was carried out on deposit taking SACCOs in the county.
Secondary data was collected from SASRA using a data collection sheet and a panel data analysis
performed using STATA software and findings were presented using tables. The study concluded that
firm revenue does not mediate the relationship between board characteristics and financial distress of
Deposit Taking SACCOs. Though firm revenue should be enhanced, governance should be improved
since it remains a critical success factor in alleviation of financial distress.
