Kenya: CMA Issues 4th Edition of the State of Corporate Governance Report

3 January 2022

Nairobi — The Capital Markets Authority (CMA) has issued the Fourth Edition of the Report on the State of Corporate Governance for Issuers of Securities to the Public in Kenya. The report is for the financial year 1 July 2020 to 30 June 2021.

The annual publication outlines CMA's independent assessment of companies listed on the Nairobi Securities Exchange (NSE) and the issuers of corporate bonds are applying the principles and recommendations contained in the Code of Corporate Governance Practices for Issuers of Securities to the Public, 2015 (CG Code).

The CMA Chief Executive Wyckliffe Shamiah noted; "Out of the seven governance principles assessed, there was improved performance on rights of shareholders, stakeholder relations and ethics and social responsibility' The overall weighted average score for 2020/2021 assessment was 70.2% (good rating) compared to 72% (good rating) for the previous assessment".

The number of issuers in the leadership category remained 25, those in the good rating category decreased from 11 to 8, those in fair rating increased from 8 to 10 while those in needs improvement rating increased from 4 to 5. A total of 49 issuers were assessed during this period.

A sectoral analysis of performance revealed that the banking sector had the best weighted score with a leadership rating across all the principles of the Code while the agricultural sector had the least weighted score with a fair rating. 'We continue to see boards of issuers exercising their duties and responsibilities with clarity, assurance and effectiveness in line with the Code while embedding good governance & sustainability practices into their business dealings and culture', Mr Shamiah added.

The Authority continues to appreciate the importance of collaboration and partnerships, as demonstrated by the MoUs signed with a number of institutions including; the Institute of Certified Secretaries (ICS), Fund Managers Association (FMA) and Association of Retirement Benefits Schemes (ARBS).

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