Can the women save Kenya Power?

Out of the eight independent directors on the board of the electricity utility, Kenya Power, five are women. They have been sitting on the board of the financially troubled firm for just over eight months.

Thus, in terms of expanding gender representation on boards of listed companies, Kenya Power has done fairly well.

KCB Kenya, with a total of five women out of 11, also ranks well in terms of gender representation on this key policy-making body within companies.

In the case of Kenya Power, even the chair of the board is occupied by a woman: the long-serving CEO of the East Africa Development Bank and one-time director of the Central Bank of Kenya(CBK), Vivenne Yeda.

The rest of the women on that board are Elizabeth Rogo, Caroline Kittony–Waiyaki, Beatrice Gathirwa, and Imelda Bore.

As I look at these trends in gender composition of boards, the results of a study on the phenomenon known as the ‘glass cliff’ published in an article I recently read in the Harvard Business Review quickly came to my mind.

According to that study, women offer better leadership during a crisis. Conducted by researchers from a leading leadership development consultancy, the study found that given a chance to prove themselves in a serious position — when they are handling something which is broken and where the chances of failures are high — women tend to excel.

The study also found that women leaders in the corporate world tend to be leaders who are able to pivot and learn new skills, who will emphasise employee development even when times are bad — and will display sensitivity and understanding to stress, anxiety and frustration which workers go through during crises.

Which brings me back to the financial straits in which Kenya Power finds itself and the challenges facing the board and management. The company made a massive loss of Sh 7.1 billion last year. Finance costs have ballooned, working capital is in the negative and debt to equity ratios have trended towards the unsustainable. Can Ms Yeda and her women- dominant team perform better at managing the crisis at Kenya Power?

It remains to be seen. But from the observations she made while addressing her first annual general meeting as chairman of the company, the impression I get was that Ms Yeda is not the type of corporate leader who will be content with playing the role of a namby-pamby figurehead only interested in the trappings of high office. Her diagnosis of the the problems that bedevil Kenya Power was delivered with rare intellectual honesty. Her assignment, she stressed, was to “oversee an overhaul” of the company’s financial and operational performance.

Previous regimes at the company, she argued, had turned the once profitable company into what she described as ‘a veritable procurement machine’.

“We have taken a long hard pitiless look at what ails this company,” she added.

On electricity tariffs, she noted: “Kenyans have enough burdens on them today, we have no intention of adding to these new burdens.”

She pointed out that the company’s cash position had improved dramatically this year despite the fact that the tariff had not been increased.

As I sat there listening to her delivering the chairman’s statement, I found myself reflecting on the story of Noah of the Old Testament: the greatest corporate leader and turnaround artist and the man who managed to keep a company afloat at a time when the whole world was under liquidation.

For the causes of Kenya Power’s financial problems are myriad and deep. They include huge technical and commercial losses, tariff cross subsidies, non-payment of electricity bills by State departments, an unsustainable build-up in capacity charges on contracted power and expensive thermal power purchase agreements.

The recent decision to renegotiate power purchasing agreements with merchant power agreements is only the easy part. More difficult challenges remain ahead.