Six chief executives of Kenyan listed companies departed from their corner offices this year, with four of them succeeded by interim appointments, signaling unpreparedness by the boards to make substantive replacements.
The companies that witnessed CEO departures without permanent successors were Kenya Airways, Longhorn Publishers, Standard Group and Eveready East Africa. WPP Scangroup and Crown Paints, meanwhile, made substantive replacements for their leaders who left.
The number of exits of chief executives of Nairobi Securities Exchange-listed firms this year was higher compared to last year's five departures at TotalEnergies Marketing Kenya, Unga Group, Standard Group, Nation Media Group and the bourse operator (NSE).
Human resource experts argue that companies turn to acting CEOs for temporary stability but the prevalence of interim appointments point to inadequate succession planning.
“It is an indication of lack of preparedness on the part of the board because, for most CEOs, you must declare six months before your end of term if you are available for reappointment and even if you get greener pastures, there is a period of serving notice," Dr Ben Chumo, the chairman of Eagle HR consultants, said.
"If it is my last term, the board should initiate the process so that there is a smooth handover to a permanent successor without need for an acting CEO."
Some of the chief executives who exited during the year include Allan Kilavuka of Kenya Airways. He was replaced, in an acting capacity, by George Kamal.
The airline said Mr Kamal will serve in the interim capacity as the process of recruiting a substantive replacement starts.
Mr Kilavuka first occupied KQ’s top seat in a temporary position for three months before he was confirmed to the position that he held for six years, indicating that the national carrier is yet to implement a seamless succession plan.
Mr Kilavuka’s contract runs to April 2026 with the airline declaring he was proceeding on terminal leave from December 16, before expiry of his tenure during which period the airline is expected to competitively hunt for his successor.
Maxwell Wahome left Longhorn Publishers on September 30 after a seven-year stint with the company reporting losses in the last four years.
Longhorn turned to previous chief executive, Simon Ngigi to step in an acting capacity stating that he will ensure continuity.
Standard saw Marion Gathoga-Mwangi depart in mid-June after just ten months with Chacha Mwita taking the reins in an acting capacity beginning July 1.
Eveready appointed Elsie Thuo in an acting capacity following an overhaul of its board.
“The best way to manage is to ensure the departure of any critical position does not leave a lacuna. So, a campany's board should have somebody ready to take over. For example, in the case of a CEO, they should have a minimum of three possible successors lined up,” said Dr Chumo.
Marketing and communications firm WPP Scangroup and Crown Paints, made substantive replacements of their chief executives.
WPP Scangroup promoted internally, appointing Akua Owusu-Nartey who served as acting managing director for Scanad Kenya, a marketing arm of the business, to replace Patricia Ithau.
Ms Owusu-Nartey’s appointment took effect on November 21, four months after Ms Ithau left.
Scangroup’s chief finance officer, Miriam Kaggwa, had held the chief executive position in the interim.
Crown Paints, in October, went for outsider Mustafa Turra, from Olam Agri Nigeria, to replace the long serving Rakesh Rao.
Human resource experts hold that companies which make a direct permanent appointment tend to perform better than those who first have temporary holders in acting capacity.
“Acting is not a healthy environment because performance drops as you are not sure whether you will be appointed fully,” said Dr Chumo.
He added: "Strategy will suffer because the acting CEO may not want to make long term decisions and that uncertainty is not limited to the CEO but it spreads across the organisation.”
Employees in an organisation headed by an interim leader are likely to take a wait-and-see stance that stalls initiative and prompts top talent to consider exit strategies.
“As someone who has been an acting CEO (at Kenya Power), I would advise those holding the position in the interim, if they are seeking to be confirmed, they should ignore the word acting and look long term –be decisive,” said Dr Chumo.
