A new report by Institute of
Directors Kenya shows that the East African country ranks 14th in Africa, and
is one of the top five improving nations in corporate governance.
The report comes on the back
of investment firm Cytonn Investments saying that at least 2.6 billion dollars
of investor’s wealth had been lost as a result of corporate governance
malpractices.
“We looked at the progress
that a country has made since the year 2000, we went back to the year 2000 when
the first report was launched, we looked at the activities that have taken
place in market since the promulgation of the new constitution in 2010,” said
Meshack Joram, CEO Institute of Directors Kenya.
The report resulted in a few
findings and patterns that allowed the institute to determine some factors that
allow a country to be more compliant.
“What we have seen is that
there is a very close correlation between the state of a country’s economic and
political development, with the state of the development of corporate
governance in that country and this report clearly highlights that because if
you look at how the countries have been ranked in Africa, there is a very clear
correlation.”
“We are happy as an institute
of directors and even as the Africa corporate governance network, that the
governments in Africa are beginning to listen to what we are saying – in Kenya,
we have seen that we have made very significant progress in terms of
development with our corporate governance, the capital markets authority has
been very instrumental in that regard, and the public sector has also been able
to take cue.”
Corporate governance
malpractices used to be associated more with government, Joram says people
assumed that everything that went wrong in the economy were through the public
sector, but now the private sector is also coming out ensuring everyone is held
to account.
“We begin to ensure that we
can be able to hold all directors to account and help ensure that there is a
significant improvement in the state of development in our companies and even
as a country as a whole,” said Joram.
He adds how the private
sector needs to continue to come out strongly and play a positive role because
both the private and the public sector have to work together for countries like
Kenya to make progress within issues of corporate governance.
“That level of awareness is
very critical for us to be able to make that progress that we need to make as a
country – if you look at the progress that we have made and what we are trying
to as a country, there is a lot that you can learn from them.”
Credit: CNBC Africa
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