Implementation of corporate governance rules that require shareholders to approve election and dismissal of external auditors has raised Kenya’s investment profile, earning the country global acclaim as top protector of minority investor rights.
The World Bank Doing Business 2020 report ranks Kenya top in the minority shareholder protection parameter.
The rule on external auditor hiring and firing mark an improvement on minority investors’ protection efforts Kenya adopted last year.
Implementation of corporate governance rules that require shareholders to approve election and dismissal of external auditors has raised Kenya’s investment profile, earning the country global acclaim as top protector of minority investor rights.
The World Bank Doing Business 2020 report ranks Kenya top in the minority shareholder protection parameter.
The rule on external auditor hiring and firing mark an improvement on minority investors’ protection efforts Kenya adopted last year. The measures include increased disclosure requirements, regulation of transactions involving related parties and enhanced shareholders’ role in major corporate decisions.
The report also shows the introduction of online registration, modification and cancellation of security interests as well as public online searches of its collateral registry have lifted Kenya’s access to credit ranking to fourth-best in the world.
Overall, Kenya’s Doing Business ranking has improved five places this year to rank at position 56 globally, the World Bank said in its latest report, which also shows that slow registration of property and starting a business remain the biggest hindrance.
East Africa’s largest economy finished at position 61 in ease of doing business index last year, out of the 190 economies surveyed.
The new report, which saw Kenya ranked among countries that delivered the highest number of reforms, makes it the third most competitive economy in Africa after Mauritius (13th) and Rwanda (38).
“Kenya’s achievement this year builds on a sustained multi-year reform effort,” Industrialisation secretary Adan Mohamed said in Nairobi.
“For the past five years, Kenya has implemented numerous reforms including enacting several laws such as the Companies Act, the Insolvency Act, Business Registration Act, Movable Property Act and automation of various processes.”
The country, is however, worse than the average score in about three out of the 10 parameters assessed by the World Bank, implying hard task ahead to achieve the targeted 30th position in two years.
The worst performance areas include starting a business in Kenya in which ranked position 129, cross-border trade (117) and getting construction permit (105).
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