Directors aged 75 years to retire by December

• The capital markets regulator, CMA, says it has proposed amendments to the corporate governance regulations to provide that any director aged above 75 leave office by end of December.
• The Treasury is expected to give the new rules the force of law through publication in the Kenya Gazette, said Kung’u Gatabaki, who chairs the Capital Markets Authority’s (CMA) board.
• Kenya has a large number of ageing directors, some of who have sat in the boards of listed firms for more than 30 years.
• Replacement of these directors means that the companies must hold special general meetings to elect their successors because only shareholders are by law allowed to elect new directors.
• The CMA’s move brings to an end the boardroom careers of some of corporate Kenya’s most enduring operators who have used networks of old money to prop up their directorships.
• A survey commissioned by the CMA in 2010 found that many directors had little idea of what was happening in their companies.

A major shake-up is looming in corporate Kenya at the end of the year when new rules barring public company directors aged above 75 years from office come into force.

The capital markets regulator, CMA, says it has proposed amendments to the corporate governance regulations to provide that any director aged above 75 leave office by end of December.

This means that individuals aged 75 years and above and are currently occupying board seats have three months to prepare for retirement in a move that is primed to be the biggest boardroom transition in Kenya’s history.

The Treasury is expected to give the new rules the force of law through publication in the Kenya Gazette, said Kung’u Gatabaki, who chairs the Capital Markets Authority’s (CMA) board.

Kenya has a large number of ageing directors, some of who have sat in the boards of listed firms for more than 30 years.

The list of directors who must exit boardrooms by January 2013 includes former vice-president Moody Awori who chairs the Eveready East Africa board. He is 85.

Others are 76-year-old Christopher Obura who chairs Olympia Capital and Express Kenya, Titus Mbathi of KenGen (83), Solomon Karanja (76) of Bamburi, 76-year old Michael Somen who is currently a director at NIC Bank and previously at AccessKenya, Ameer Kassim Lakha (79) and Jack Kisa (75), both of TPS East Africa.

Also targeted by the new rules are former directors of troubled motor dealer CMC where former attorney-general Charles Njonjo (92), Jeremiah Kiereini (82) and Richard Kemoli (75) have been board members for more than 30 years. The three also hold board seats in other listed companies.

Replacement of these directors means that the companies must hold special general meetings to elect their successors because only shareholders are by law allowed to elect new directors.

The CMA’s move brings to an end the boardroom careers of some of corporate Kenya’s most enduring operators who have used networks of old money to prop up their directorships.

Some of the individuals who will be affected by the new regulations have already been banned from serving as directors in companies listed at the Nairobi Securities Exchange (NSE), on account of alleged involvement in the financial irregularities at CMC.

READ: End of an era as regulator ejects veteran directors

Mr Kiereini, who tops the list of barred directors on the account of developments at CMC, has gone to court to contest the decision, arguing that it violates his inalienable right of association with people and institutions of his choice.

If gazetted into law, the CMA’s latest move means that even if Mr Kiereini – or any other director is successful in court – he will still have to leave on account of age.

Mr Kiereini resigned from the CMC board in March last year after a bruising boardroom battle with newly-rich shareholders. He has since left East African Breweries and CfC Life where served as a director.