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The supreme Ugandan shadow director

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Uganda Airlines bombardier CRJ-900. FILE PHOTO | NMG

One dark night, two men are walking home after a party and decide to take a shortcut through a cemetery. Right in the middle of the cemetery, they are startled by a tap-tap-tapping noise coming from the misty shadows. Trembling with fear, they find an old man with a hammer and chisel, chipping away at one of the headstones.

"Walalala!" one says after catching his breath. "You scared us half to death. We thought you were a ghost! What are you doing, working here so late at night?"  "Those fools!" the old man grumbled. "They misspelled my name!"

Last month, our Ugandan brethren were caught up in a governance kerfuffle involving the highest office in the land. In early July 2022, the Board of Uganda Airlines appointed Ms. Jennifer Bamuturaki as the new Chief Executive Officer.

Actually, that’s not true. According to an East African newspaper article published on July 7th that reported the appointment, what really happened was that on July 5th the chairperson of the airline’s Board received a letter from the Minister for Works and Transport, General Katumba Wamala.

The letter informed the Board Chairperson that Ms. Bamuturaki, who up until minutes before the letter was received had been serving as interim CEO for more than a year, had been appointed as the substantive CEO.

The good General wasn’t trying to take one for the team. He shone a bright light into the misty governance shadows and stated that it really wasn’t his idea and that actually, the directive had come from the permanent occupant of Uganda’s State House back in April.

The East African article doesn’t delve into why it took the Minister another three months to act on the said directive, but we are not here to question the slow grinding wheels of bureaucratic execution. And neither was the Ugandan Parliament interested in that time-lapse.

What they were interested in was how in heaven’s name someone who didn’t apply for a job get it in the first place? Moreso since the globally renowned firm PwC had been appointed by the airline’s Board to spearhead the recruitment of the CEO and the process was still ongoing.

So on August 17th  2022, Ms. Bamuturaki appeared before the Parliamentary Committee on State Authorities and State Assets to answer questions about her appointment. The Committee found that she did not have the minimum academic qualifications required for the job as advertised by PwC, but found that her 15 years of experience surpassed the 10 years required on the advert.

After flexing their legislative muscle and making all the requisite noises (Kenyan jurists might call it hot air and somewhat of a wild goose chase) required for their constituents to know that they were hard at work, that was it. The good lady continues to lead the airline and life moves on as it very well should.

What the State House occupant did was to direct the Board from the shadows. The interesting thing is, under company law anyone who provides direction from the shadows can be dragged out into the light to attract the same kind of liability as a substantive director in the event you know what hits the fan.

They are called a shadow director. Section 2 of the Ugandan Companies Act defines it quite explicitly by stating that a director includes any person occupying the position of director by whatever name called and shall include a shadow director.

The Kenyan Companies Act gives a little more illustration on what this shadow directorship looks like. While not expressly using the word “shadow director” section 3 provides that a director is any person who a) occupies the position of a director by whatever name the person is called and b) any person in accordance with whose directions or instructions the directors of a company are accustomed to act.

Such advice excludes that coming from a professional capacity such as lawyers or auditors for example. 

The good General who is the line Minister already set the trend for the Board in case of any trouble that may emerge ahead. He pointed his finger upstairs and said in the immortal words of Shaggy, the reggae singer, “It wasn’t me”.

In the unlikely event the Board of the airlines is ever in the dock for corporate malfeasances due to the acts or omissions of the CEO, they too can sing in unison “It wasn’t us” while being left solo at the lights of presidential immunity.

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Twitter: @carolmusyoka