The CBK owes Kenyans an explanation why it is unable to meet this simple standard of having in place a full board. Surely this cannot because of lack of people with the right qualifications to occupy them.
The concerns raised by the Auditor-General Nancy Gathungu over Central Bank of Kenya (CBK) operating without a fully constituted board need to be addressed.
The financial regulator is operating with only seven directors out of the 11 required. Currently, there are only four non-executive directors, which is only half the number stipulated in the law.
The CBK has also been without a second deputy governor for the last financial year ending June 2020, a situation which is in breach of the law that clearly states that the regulator must have two deputy governors
This apparent act of omission is a grave matter for a number of reasons. An institution with such a weighty responsibility in the economy requires a diverse board as envisaged in the law.
The board’s functions include handling CBK’s strategic, financial and operational issues.
This is by no means an easy mandate and the board can only measure up to this task if it is properly constituted.
The CBK, as pointed out by the Auditor-General, cannot perform optimally if its board is operating with such key positions remaining unfilled.
Secondly, the CBK as regulator of banks has been pushing lenders to ensure they have a diverse board that has adequate room for independent directors.
This calibre of directors are those that are not direct or indirect representatives of the key shareholders to offer an independent voice in boardrooms.
As the enforcer of financial regulations, the CBK should also set a good example to financial institutions and companies on best corporate governance practices. How can it insist on compliance to rules when it is breaching the law in such a blatant manner? The CBK owes Kenyans an explanation why it is unable to meet this simple standard of having in place a full board.
Surely this cannot because of lack of people with the right qualifications to occupy them.
There are many Kenyans out there with the requisite skills, experience and talents to serve on the board.
The appointing authority should, therefore, act expeditiously to resolve this matter.
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