Listed NSE firms to abide by CMA Corporate Governance Code

By KBC Reporter

Listed firms on the Nairobi Securities Exchange are required to abide by, and implement the Corporate Governance Code launched by the Capital Markets Authority within a year after its gazettment last month.

The code seeks to boost confidence among local and foreign investors at the securities.

National Treasury Director of Economic Affairs Geoffrey Mwau says this will also help Kenya achieve the 8.37 trillion shillings market capitalization target in seven years from the current 2 trillion in which 40 more companies will be listed by then. NSE currently has 65 listed companies.

Deteriorating corporate governance has been exposed and left bare in recent weeks when the banking sector revealed some grave miscalculations that threatened to bring to a standstill the banking sector.

And while the affected have been non listed firms, some listed companies such as Kenya Airways and Mumias Sugar have also experienced questionable management decisions.

Gazetted on 4th March this year the Code of Corporate Governance for Issuers of Securities to the Public seeks to entrench efficient management for listed firms.

According to National Treasury Director General of Budget, Fiscal, and Economic Affairs Geoffrey Mwau, this will spur confidence among investors at the securities, pushing NSE’s market cap from 2 trillion to 8.27 trillion by 2023 through listing of additional 40 firms from the current 65. This he says will make Nairobi among the global financial hubs.

The new code addresses among others; board operations and control, rights of shareholders, accountability, risk management and internal control, transparency and disclosure.

The Board is required to publish a statement of policy on good governance and the status of the application of the Code at the end of every year.