The Institute of Directors of Kenya (IOD Kenya) has applauded the recent interventions by the Central Bank of Kenya to strengthen corporate governance within the banking sector arguing that these interventions to put some banks into receivership will help reduce systemic risks in Kenya’s economy.
The non profit institute says that it noted with concern that the recent bank closures and also other problems facing public entities are often linked to negligence or misconduct at the board level.
“This is a wake-up call for boards, directors, regulators and even appointing authorities, all of whom have a role to play in the constitution and appropriate management of qualified, competent and credible boards. However for it to be a truly effective wakeup call there must be sanctions for failure to comply with the laws and regulations on corporate governance and the banking sector. We also see this as a wake-up call for all banks and institutions to ensure that they comply with the Laws of Kenya in respect to corporate governance.” Read a statement published in the local dailies.
The insitute now calls for punishment any director whose found to have failed to uphold the standards of conduct for a director.
The insitute also recommends a mandatory corporate governance training by a credible institution before being eligible for appointment to a Board and a requirement for continuous training for current directors which is subject to membership in a professional regulatory body such as IOD, ICPAK, LSK to promote professionalism and accountability
