Capital Markets Authority hires experts to draft corporate code
Updated Wednesday, September 11th 2013 at 23:02 GMT +3
The Capital Markets Authority (CMA) has hired foreign consultants from the World Bank and the International Finance Corporation (IFC) to help draft a new code of corporate governance for the capital markets.
The new guidelines seek to streamline operations, control the boards of directors of listed companies and give more protection to minority shareholders who have in most cases been made to dance to the tune of their majority counterparts.
A new study by the World Bank shows that minority shareholders of firms listed at the Nairobi Securities Exchange (NSE) are more vulnerable to abuse compared to their counterparts within the East African Community (EAC).
The new rules also seek to enhance transparency and disclosure requirements in listed entities and improve on the existing regulations and enforcements procedures.
The CMA Corporate Governance Steering Committee chaired by Ms Catherine Musakhali has so far prepared the blueprint for the proposed guidelines.
Musakhali who is also the chairperson of the Institute of Certified Public Secretaries of Kenya (ICPSK) said the blueprint would be exposed to the stakeholders before the end of this month (September).
“We have a draft of the blueprint which we are finalising and will be exposed to the stakeholders before the end of this month,” she told The Standard yesterday.
Musakhali said from there the blueprint would be presented to the CMA board before a move is made to the next stage of preparing the code of corporate governance.
She added that the current law and practices relating to minority shareholders would be reviewed and then recommendations made for improvement. CMA Chairman Kung’u Gatabaki said once enacted the new code of corporate governance would give CMA powers over all listed companies. “Our powers are currently limited to our licensees” he said.