NAIROBI, Kenya – Kenya’s listed companies experienced a slight decline in corporate governance ratings for the financial year ending June 2024, according to the latest report from the Capital Markets Authority (CMA).
The seventh edition of the “State of Corporate Governance for Issuers of Securities to the Public in Kenya” shows a drop in the annual weighted overall score for issuers, slipping from 75.71 percent in 2022/2023 to 73.56 percent in 2023/2024—a 2.15 percent decrease.
The report attributes this decline to issuers’ failure to fully adhere to the principles outlined in the Code of Corporate Governance.
CMA’s assessment, now focusing more on implementation rather than mere disclosure, evaluated 52 listed firms.
Among the assessed firms, 27 received a Leadership Rating, denoting excellence in governance.
Thirteen issuers achieved a Good Rating, eight were classified as Fair, and four fell into the Needs Improvement category.
“This comprehensive assessment serves as a crucial roadmap for issuers, showcasing areas of excellence while identifying opportunities for improvement. Our ultimate goal is to strengthen corporate governance and sustainability practices, fostering long-term growth, transparency, and enhanced stakeholder confidence in the capital markets sector,” CMA Chief Executive Wyckliffe Shamiah stated.
The banking sector, which previously held a Leadership Rating across all principles, saw a downgrade to a Good Rating in Board Operations and Control.
This dip is partly due to independent and non-executive directors serving in multiple roles within group entities, contrary to the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023.
The insurance sector also faced a decline, dropping from a consistent Leadership Rating to a Good Rating in Board Operations and Control and Stakeholder Relations.
Conversely, the Construction and Allied Sector demonstrated notable improvements, advancing from a Fair Rating to a Good Rating across several principles.
Transparency and Disclosure within this sector even achieved a Leadership Rating, reflecting increased commitment to corporate governance.
However, Stakeholder Relations remains a weak point across multiple sectors, including Construction & Allied, Energy & Petroleum, Insurance, Investment, and Non-Listed Issuers.
The seventh edition of the “State of Corporate Governance for Issuers of Securities to the Public in Kenya” shows a drop in the annual weighted overall score for issuers, slipping from 75.71 percent in 2022/2023 to 73.56 percent in 2023/2024—a 2.15 percent decrease.
The report attributes this decline to issuers’ failure to fully adhere to the principles outlined in the Code of Corporate Governance.
CMA’s assessment, now focusing more on implementation rather than mere disclosure, evaluated 52 listed firms.
Among the assessed firms, 27 received a Leadership Rating, denoting excellence in governance.
Thirteen issuers achieved a Good Rating, eight were classified as Fair, and four fell into the Needs Improvement category.
“This comprehensive assessment serves as a crucial roadmap for issuers, showcasing areas of excellence while identifying opportunities for improvement. Our ultimate goal is to strengthen corporate governance and sustainability practices, fostering long-term growth, transparency, and enhanced stakeholder confidence in the capital markets sector,” CMA Chief Executive Wyckliffe Shamiah stated.
The banking sector, which previously held a Leadership Rating across all principles, saw a downgrade to a Good Rating in Board Operations and Control.
This dip is partly due to independent and non-executive directors serving in multiple roles within group entities, contrary to the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023.
The insurance sector also faced a decline, dropping from a consistent Leadership Rating to a Good Rating in Board Operations and Control and Stakeholder Relations.
Conversely, the Construction and Allied Sector demonstrated notable improvements, advancing from a Fair Rating to a Good Rating across several principles.
Transparency and Disclosure within this sector even achieved a Leadership Rating, reflecting increased commitment to corporate governance.
However, Stakeholder Relations remains a weak point across multiple sectors, including Construction & Allied, Energy & Petroleum, Insurance, Investment, and Non-Listed Issuers.
