A challenging business environment has no doubt left a number of public listed companies with less rosy outcomes whose ultimate reflection has been the plummeting of share prices at the Nairobi bourse.
For many companies, the poor outcomes are the result of external market forces, or business cycles that they can only wait to turn the corner. But for some, the dip is purely the result of internal governance and management weaknesses that have spiralled into real financial and image challenges.
Business outcomes aside, the Capital Markets Authority regulations obligate listed companies to publish timely annual financial reports. Failure by some companies – Mumias Sugar, Kenya Power, East African Portland Cement and Uchumi Supermarkets – to do so definitely signals the depth of challenges they are facing. Though each of the firms has provided reasons for the delay there is a common thread.
As the Institute of Directors (Kenya) has rightly pointed out, the delays expose the underlying poor corporate governance in the firms.
Again, the common streak among the companies is poor performance, mismanagement, corruption and boardroom wars. The CMA says implementation of the Code of Corporate Governance Practices for Issuers of Securities will rein in listed companies flouting regulations and best management practices. But rules alone are not enough. The regulator should crack down on rogue listed companies to cushion investors from losses linked to bad governance and impunity.
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Note: The results are not exact but very close to the actual.
