Business Daily (Nairobi)
Mwaura Kimani
8 May 2008
While the hunt for a new chief executive officer of the Capital Markets Authority remains top on the radar of corporate recruitment, questions still linger why the recruitment executives at Hawkins Associates, charged with picking a person for the job, have not found the right candidate yet despite the ordinary credentials advertised.
With a Masters degree in Business Administration (MBA), Economics, Finance, Law, Insurance or related fields and 10 years experience gained in securities and financial markets, one could easily become a CMA boss, if the job advertisement was anything to go by.
But five months down the line, and a month after Hawkins Associates re-advertised the position, the post is yet to be filled.
A previous short-list was drawn and interviews conducted but the search flopped, an apparent admission that the process failed to attract the calibre of executives needed to take CMA to the next level and tackle emerging challenges.
The unsuccessful protracted hunt for Mr Edward Ntalami's successor and previous hiring of top executives brings into focus just what credentials recruiters are looking for and the unique challenges they are facing as they embark on opening some of the most impressive CVs sent to their mail boxes.
The Business Daily sought insights from leading professional recruiters, human resource practitioners and consultancies on whether there is a particular career path or qualifications that could propel one to the top of a company. What specific talents are they looking for?
A glimpse into Kenya's dynamic and flourishing corporate sector reveals that a sizeable portion of the finest brains running leading companies in Kenya have had what appears like uniform skills, qualifications and experience.
Looking at bosses at the helm of the 11 top companies gauged by market capitalisation at the Nairobi Stock Exchange (NSE), a sizeable number of them have a business inclined training, eight of them being holders of Bachelors degrees in Commerce, Accounting or Finance.
Theirs is a picture of a trendy career path which has thrust them to the top of the country's corporate scene, where their decisions determine the fortunes of thousands of Kenyans who have invested in the companies they head.
These are East African Breweries, KenGen, Mumias, Barclays Bank of Kenya, Equity Bank, Kenya Commercial Bank, Standard Chartered Bank, Bamburi, CFC Bank, Kenya Airways and Nation Media Group.
Just like in politics, in the business world, institutional-investor pressure has intensified, forcing management to show results, with globalisation and the Internet making competition stiffer. The overall result has been a sea change in the choice of chief executives.
Management experts and executive hiring firms say recruitment decisions for the top dogs in most company boards revolve around whether to hire an outsider or insider CEO, considering the reasons for a replacement. They are in agreement that the success of a new CEO to spearhead the growth of a company will hinge on the ability to follow through on one's own vision - but its a corporate blunder for a company under siege to pick an insider.
Factors such as the level of experience under their belt and a personal dynamism and vision that would help transform a company come into play. Simon Muthiora, the manager at Joblink - an executives recruiting firm in Kenya -says CEOs with a marketing and finance- biased training or experience are the most sought after in the local corporate scene.
"Keen directors and shareholders want someone with a 'commercial mind' who can lead a marketing wave from the top, and this is what sells a company," said Mr Muthiora, who is also a management consultant with Manpower Services. Boards of companies- charged with the responsibility of choosing CEOs in most firms- are normally faced with a dicey dilemma on who to select.
A trumpeting caution is normally that a hiring blunder could come with a heavy thud of employees' lay-offs, hurt families, furious shareholders and a possibility of demoralising power wars within the firm.
William Muchangi, a human resources manager at audit firm, Ernst &Young, says the state of the company while hiring determines which candidate to pick, with most hiring being guided by a specific strategy that the company wants to embark on.
"Companies are looking for people who have demonstrated sound leadership on account of their managerial prowess borne out of wisdom and experience in the world of business, within and outside the country," said Mr Muchangi.
While some CEOs were in the right place at the right time, most owe their success to meticulous management, exposure and staff training sessions by some of the companies they joined as ordinary employees.
Though the corporate raiders argue that the cost and time it takes to groom successful executives is long, experience has shown that it is also a sure way of ensuring continuity in an organisation.
Grooming and stringent succession plans are steadily gaining grounds, with company boards identifying prospective replacements long before the exit of a serving CEO.
This, says Mwangi Ngumo, the chief executive at Kenya Institute of Management, is the way to go to ensure continuity, citing the examples of KCB where Martin Oduor-Otieno had been taken through the hierarchy long before he was appointed to head the bank.
Mr Oduor-Otieno is among the CEOs who have risen from the bottom to the top echelons of the companies either internally or externally.
"Hiring externally in most cases slows the company's growth," said Mr Ngumo.
And the rise to the top usually involves factors unique to a company's own industry or culture.
As corporate restructuring continues to gain prominence locally, there has been a booming emergence of contemporary titles that have cropped up in today's companies, mainly the increase of C-level job descriptions such as chief operations officer, chief financial officer and others.
A look at Kenya's companies also shows that most executives who have served in top positions or headed the finance department, have had an edge over others in rising to the top.
Adan Mohammed of Barclays Bank and Gerald Mahinda of East African Breweries have both served in the post of finance director prior becoming CEOs. Mr Oduor-Otieno of KCB also served as the finance director at Barclays Bank before joining KCB.
Richard Etemesi, the CEO at Standard Chartered Bank whose career path is rich in foreign exposure has also followed the same path. In 2004, he became the bank's executive director in charge of finance and strategy for the East Africa region.
But other CEOs are generally a product of factors unique to a specific industry. Kenya Airways managing director, Titus Naikuni, holds a Bachelor of Science degree in Mechanical Engineering while Mugo Kibati of East African Cables has a Bachelors degree in Electrical Engineering. Both have vast technical experience and qualifications, critical in the industry where their companies operate.
Mr Muchangi says, while there are many quantitative measurements, such as stock price history or background experience, the attributes that may have the greatest impact on a candidate's potential success are softer, qualitative ones.
"Issues of passion and strength of convictions, as well as ability to lead could explain the rise of most of the CEOs from lower cadres to the helm of the companies," he said.
International exposure, the experts say, gives prospective CEOs an unchallenged competitive edge over those who have been trained and worked locally. Mr Kibati, Mr Etemesi, Mr Kidero, Mr Mohammed and Mr Mahinda have had a stint in the global market where they served in senior positions in different companies.
A recent global study by the consulting firm McKinsey & Co said more companies are about to be engaged in a war for the top executive talent. "Most companies are ill-prepared for the executive recruiting challenge ahead," says the report.
Kenya's executive salaries have reached record levels with senior managers taking home the highest pay in Africa and developed countries such as Japan, United Kingdom and Canada.
A PricewaterhouseCoopers report released last year indicated that the highest paid chief executives in Kenya are earning between Sh1.9 million to Sh2.5 million led by financial services and professional services industry.
The dilemma of promoting an insider into the top position can be challenging for directors.
"They're trying harder to promote from within, rather than hiring charismatic, but untested CEOs from the outside. But sometimes an external search is necessary, and boards have to try to build a consensus on the specifications being sought", says Monicah Njeru, a management consultant in Nairobi.
The sterner stuff Kenya's top CEOs are made of:
Adan Mohammed
CEO, Barclays Bank (Kenya)
He holds a Bachelor of Commerce degree from the University of Nairobi and a Masters in Business Administration from Harvard Business School. He joined Barclays Bank of Kenya in October 1998 and after nine months, he was appointed finance director, later rising to the post of managing director. Before joining the bank, PricewaterhouseCoopers sent him to London in 1989 for training as a chartered accountant, but he later changed to consultancy and was posted to Shell in Nigeria for three years. Under his watch, the bank has aggressively increased assets in both corporate and consumer business, and brought innovative products into the market. The bank had a market capitalisation of Sh100.4 billion and its share traded at Sh73.50 during yesterday's trading at the NSE.
Martin Oduor-Otieno
CEO, Kenya commercial bank
The man at the helm of Kenya Commercial Bank holds Bachelor of Commerce degree in Accounting, an MBA and a CPA (K).
Oduor-Otieno joined KCB in 2005 and prior to his appointment as CEO, he was the bank's deputy chief executive for 18 months. He took over from Terry Davidson whose contract expired in July this year. Mr Oduor-Otieno has also served as a finance director in Barclays Bank of Kenya.
Titus Naikuni
CEO, Kenya Airways
Perhaps an exception from other featured top CEOs, Mr Naikuni of Kenya Airways holds a Bachelor of Science (Hons) degree in Mechanical Engineering from the University of Nairobi and an MBA from Harvard Business School. His career growth has been boosted by his technical qualifications, a key requirement for the industry . He was picked from Magadi Soda Company, where he had joined in 1979 as a trainee engineer rising to become its managing director as well as the MD at Magadi Railway Company. Having being at the helm of the 'Pride of Africa' since February 2003, he has steered the airline through the turbulence of the aviation industry into a powerhouse in Africa. Kenya Airways plays in the billion profits club in the country and region with its stocks among the most traded and best performing at the NSE.
Gerald Mahinda
CEO, East African Breweries Ltd
Mr Mahinda, another product of the finance- top route and an accountant by profession, has been at the helm of EABL for the last four years. He joined as the group finance and strategy director and has propelled the brewer to become one of the leading companies in the region. He served a one year- assignment at Guinness Nigeria Plc as the strategy and change director in 2003. The beer maker's half year net profits announced in March jumped 28 per cent to Sh3.8 billion up from Sh3 billion posted during the same trading period in 2006.
Evans Kidero
CEO, Mumias Sugar
Dr Kidero holds a Master of Business Administration degree from United States International University. Dr Kidero was the head of the West African region at pharmaceutical giant GlaxoSmithKline. He later joined the Nation Media Group in 2000 as managing director of the Nation Newspapers Division. In 2003, he joined the Mumias Sugar Company as CEO. With a market capitalisation of Sh21 billion, the company's shares have been trading at an average of between Sh11 to Sh68 on the stock exchange over the last one year.
James Mwangi
CEO, Equity Bank
Dr Mwangi who heads Equity Bank-the biggest micro-finance institution in the country-holds a Bachelor of Commerce degree (Accounting) from the University of Nairobi and is a Certified Public Accountant, CPA (K)). He was previously with Ernst & Young and Trade Bank Limited and has been in the banking industry for over 17 years. He joined the bank in 1994. Under his leadership, Equity Bank posted 2007 pre-tax profits of Sh2.4 billion, a 116 per cent increase from the Sh1.1 billion realised in 2006, boosted by higher asset growth. The bank clocked the one million customers mark - making it control over 30 per cent of all bank accounts in the country.
Richard Etemesi
CEO,Standard Chartered Bank
He was first Kenyan to head Standard Chartered Bank's operation in Kenya and his career path is rich in foreign exposure. Mr Etemesi joined the Bank in 1992. In his 14 years with the Bank, he has held various senior positions both in Kenya and overseas. In 1999, he was appointed the executive director in charge of client relationships (corporate banking) in Zambia, where he played a major role in growing the corporate business. He then moved to Uganda as the CEO, where he was instrumental in the expansion of the distribution network and the growth of both the consumer and corporate businesses. Mr Etemesi returned to Kenya in 2004 to become the executive director in charge of finance and strategy for the East Africa region
Eddy Njoroge
MD, KenGen
He holds a Bachelor of Science degree from Makerere University. Mr Njoroge, better known for his position as managing director of KenGen, the national power generator, has been credited for his investment acumen and managerial skills. Before joining KenGen in 2003, the trained biochemist founded and chaired ABCON Ltd, a diversified group of companies and sits on the boards of the NSE and Aureos Capital.
Madabhushi Soundararajan
MD, CFC Bank
Mr Soundararajan, is a holder of a Masters Degree (Arts) from Madras University (India) and a Certificate in International Banking (New York University).
He has 33 years local and international working experience in commercial and investment banking having previously held senior positions with State Bank of India (India and US), Standard Chartered Bank (India and Kenya) and Commercial Bank of Africa Limited .
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