A new report by Institute of Directors Kenya shows that the East African country ranks 14th in Africa, and is one of the top five improving nations in corporate governance.
The report comes on the back of investment firm Cytonn Investments saying that at least 2.6 billion dollars of investor's wealth had been lost as a result of corporate governance malpractices.
“We looked at the progress that a country has made since the year 2000, we went back to the year 2000 when the first report was launched, we looked at the activities that have taken place in market since the promulgation of the new constitution in 2010,” said Meshack Joram, CEO Institute of Directors Kenya.
The report resulted in a few findings and patterns that allowed the institute to determine some factors that allow a country to be more compliant.
"What we have seen is that there is a very close correlation between the state of a country's economic and political development, with the state of the development of corporate governance in that country and this report clearly highlights that because if you look at how the countries have been ranked in Africa, there is a very clear correlation.”
"We are happy as an institute of directors and even as the Africa corporate governance network, that the governments in Africa are beginning to listen to what we are saying - in Kenya, we have seen that we have made very significant progress in terms of development with our corporate governance, the capital markets authority has been very instrumental in that regard, and the public sector has also been able to take cue.”
Corporate governance malpractices used to be associated more with government, Joram says people assumed that everything that went wrong in the economy were through the public sector, but now the private sector is also coming out ensuring everyone is held to account.
“We begin to ensure that we can be able to hold all directors to account and help ensure that there is a significant improvement in the state of development in our companies and even as a country as a whole," said Joram.
He adds how the private sector needs to continue to come out strongly and play a positive role because both the private and the public sector have to work together for countries like Kenya to make progress within issues of corporate governance.
“That level of awareness is very critical for us to be able to make that progress that we need to make as a country - if you look at the progress that we have made and what we are trying to as a country, there is a lot that you can learn from them.”