The Capital Markets Authority has released its findings on the state of corporate governance for 56 listed companies. It is the first report of its kind since the Code of Corporate Governance Practices for Issuers of Securities to the public 2015 came into effect in March 2017.
The publicly traded companies had a collective score of 55 per cent which is good according to CMA Chief Executive Officer Paul Muthaura.
“…the 55 per cent overall score compares favorably with other jurisdictions around the world. Comparatively, the Association of South East Asian countries developed a corporate governance report…which indicated that Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam scored 43 per cent, 62 per cent, 49 per cent, 56 per cent, 68 per cent and 28 per cent respectively in 2012 when the public companies in these countries were first assessed,” he said
Mr Muthaura also noted that the assessed companies in South East Asia have shown remarkable ‘improvement in adopting good corporate governance best practices’ since the first evaluation.
In an effort to achieve the Code’s goal, CMA designed self-evaluation tools with the help of key stakeholders such as issuers. The market regulator came up with a scorecard for reporting, measuring and monitoring the implementation of the Code. The template is supposed to improve adherence to corporate governance issues and reveal each issuer’s compliance to the regulation.
The first evaluation involved submission of corporate governance reporting templates and annual reports by the listed companies within a set deadline. The submitted templates were evaluated on their disclosure of important information to existing and potential investors. CMA gave feedback to the issuers with details of their strengths and areas of improvement.
The evaluation is meant to encourage listed companies to become good examples in matters of corporate governance. The financial markets authority is determined to improve corporate governance practices in Kenya.