Shareholders raise fitness queries over AccessKenya chair
Posted Tuesday, June 12 2012 at 18:34
The CMA guidelines cannot be enforced since they are not enshrined in law, but the capital markets regulator is racing to turn them into regulation in what will prompt an overhaul in the composition of the boards of NSE-listed companies.
“Chairmanship of a public listed company should be held by an independent and non-executive director,” says the CMA’s guidelines on appointment of chairmen of listed companies in Kenya. “An independent director is a director who within the last five years has not had any business relationship for which the company has been required to make disclosure.”
The guidelines also discourage key suppliers or service providers or customers of a company or executives who had been employed by the company within the last five years from being appointed as chairmen.
Companies breach rules
A number of companies including KenolKobil and Rea Vipingo have breached these rules on the appointment of their chairmen—highlighting the influence of old-boy networks in the appointment of directors.
Kenol Kobil has the CEO Jacob Segman doubling up as chair of the board while Rea Vipingo’s board is headed by Oliver Fowler, who is partner at law firm Kaplan & Stratton—which is the sisal firm’s advocates.
“There is no conflict of interest as far as Deloitte is concerned, and the board has been reviewing its service to the company,” Michael Turner, a director of AccessKenya told the shareholders in response to Mr Ndonye’s link with the auditing firm.
AccessKenya moved back into profit last year with a net profit of Sh101.4 million compared to a loss of Sh7.9 million in 2010 and its share has shed 30 per cent over the past year to Sh5.50—which is lower than its IPO price of Sh10.