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Minggu, 01 April 2012

Principles for Corporate Governance in Kenya and a Sample Code of Best Practice for Corporate Governance

NAIROBI

Prepared by: Private Sector Initiative for Corporate Governance

In November 1998, a workshop on the Role of Non-Executive Directors was held at the Kenya College of Communications Technology, Mbagathi, Nairobi. Although this seminar was sponsored and supported by leading organisations with specific interest in corporate governance such as the Nairobi Stock Exchange (NSE), Capital Markets Authority (CMA), Institute of Certified Public Accountants (ICPAK) and the Kenya Chapter of the Association of Chartered Certified Accountants (ACCA), with participation drawn from many leading corporate organisations, the organisers, M/s Dominion Consultants Limited, had no idea that this effort would develop into a major initiative on corporate governance. However, it was agreed that another forum be convened early the following year to deliberate more on the many issues that were mentioned but not exhaustively discussed. By the time the second seminar was being organised in March, 1999 at the Whitesands Hotel, Mombasa, it was becoming clear that the seminar would have to discuss major topics and principles of good corporate
governance.
The reasons for this development included, but were not limited to:
(1) The quality of governance at all levels was increasingly being seen as the most important factor for the success of both the politico-economy and its institutions.
(2) Corporate governance was increasingly taking centre stage, with the privatisation and corporatization of the economies globally.
(3) There was greater expectation from society that corporate organisations, especially private ones, should take a more leading role in the debate and implementation of economic revival strategies.
(4) In the face of major scandals leading to the collapse of big corporations, especially state owned ones, with disastrous social and economic consequences, it was inevitable that the wider society, led by the mass media, would start questioning how these organisations were run.
(5) Shareholders, especially in publicly listed companies were becoming increasingly vocal demanding better transparency and disclosure of information from their directors.
(6) Regulatory bodies, notably the CMA and the NSE, were already hinting that they would require good corporate governance practices amongst the publicly listed companies.
 
The Mombasa seminar made important decisions one of which was to create an interim committee with the mandate of doing all that was necessary to formulate a Code of Best Practice for Corporate Governance in Kenya and to co-ordinate, where applicable, with other efforts in the region and beyond for the purpose of improving Corporate Governance. The committee was also mandated to seek the establishment of a permanent organ to oversee the implementation of the Code if the effort was to be sustained. The Interim Committee set to work immediately and co-opted additional members from all organisations that were considered to have an interest in corporate governance. The committee also produced a first draft code of best practice and distributed it to over four hundred corporate organisations, development agencies, embassies and government departments with a request to send in comments about the draft and the way forward. The response was very encouraging and in the following weeks the committee was bold enough to register a Trust, and to commence the organisation of a workshop and seminar to further discuss and arrive at a wider consensus on the way forward. With the support of three development agencies, namely the Ford Foundation, the British Department for International Development and the Friedrich Ebert Foundation, a two-day workshop of experts was held at the Safari Park Hotel on the 6th and 7th October 1999. This was followed by a Seminar attended by representatives from over seventy corporate and other organisations on the 8th October 1999. 

Participants at the two functions resolved, among other things:
(1) That the Code of Best Practice for Corporate Governance, as previously circulated and subsequently refined through expert input and comments from corporate respondents, be adopted, printed and circulated as a guide for Corporate Governance in Kenya.
(2) That there was an urgent need to establish a “Corporate Sector Foundation” to promote, co-ordinate and guide corporate governance in Kenya and
(3) That the steering committee be mandated to proceed to work on the implementation of this resolution.

After the Seminar in October, the Committee continued working and it is most gratifying that we can forward this document to a much wider group of corporate and other organisations. It is our hope that this document will be discussed and analysed by corporate directors and managers wishing to commence or enhance better corporate governance practices in their own organisations.
The Private Sector Initiative for Corporate Governance, and hopefully, at a later stage, the Corporate Sector Foundation, will be more than willing to assist such organisations to implement corporate governance programmes. The Initiative has already affiliated or is in communication with all major corporate governance organisations across the globe and is building a library of knowledge and ideas that should be amply sufficient for the needs of our corporate organisations. The Initiative will further conduct studies and undertake research in all the main areas that could be of interest in the improvement of corporate governance for better national economic performance.... (baca_selengkapnya )

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