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Nairobi, Kenya, February 7, 2017
— IFC, a member of the World Bank Group, and Kenya’s Capital Markets Authority today announced a training program to familiarize directors and issuers with the Code of Corporate Governance Practices for Issuers of Securities to the Public. The new Code will be applied starting March 2017.
The corporate governance training will cover specific topics such as board effectiveness, rights of shareholders, ethics and social responsibility, risk management and internal control, and disclosure, to empower leaders to improve functioning of their boards and control environments. IFC and CMA’s first training was held in November 2016 and attracted 80 Chief Executives Officers, Chief Finance Officers and Company Secretaries from listed companies. The second round will have 200 attendees.
“Since we entered into partnership with IFC in 2016, we have seen overwhelming interest from issuers on the Corporate Governance Code,” said CMA Chief Executive Paul Muthaura. “Strengthening corporate governance practices is fundamental for issuers to succeed in mobilizing resources from the capital markets locally and globally, as well as to achieve Vision 2030 and Capital Market Master Plan.”
IFC and CMA have developed a corporate governance reporting framework which will help companies, issuers and governance auditors to structure compliance statements and ensure that stakeholders understand an issuer’s degree of compliance. The reporting framework will present data in a format that allows for cross-company comparison. The partnership has also developed an assessment framework for CMA to assess the quality of corporate governance among issuers of securities in Kenya.
IFC Director for Eastern and Southern Africa Oumar Seydi, said, “Companies with good corporate governance practices tend to carry lower risk and generate higher returns for shareholders. Good practices boost performance and build investor confidence that can lead to reduced capital and regulatory costs.’’
The Corporate Governance Code functions on an “apply or explain” principle. An issuer may explain non-application of the Code in favor of an alternative measure, as long as the alternative delivers a better standard of corporate governance. Where non-application delivers a lower standard of corporate governance, issuers will be expected to explain to the Authority, shareholders and stakeholders the reasons for non-application or partial application, the time frame required to meet each application requirement, and strategies to progress to full application. Each issuer will be required to post the completed reporting template on their website and send the same to the Authority within four months of the close of each financial year.
There are, however, mandatory corporate governance provisions that were extracted from the Corporate Governance Code. The mandatory provisions are prescribed in the Capital Markets (Securities) (Public Offers, Listing & Disclosure) Regulations, 2002.
CMA began implementing corporate governance reforms in 2012, culminating in the enactment of the new Corporate Governance Code in March 2016. The Corporate Governance Code provided issuers with a transition period on one year, within which they should commence its application. IFC and CMA have also developed a Stewardship Code for Institutional Investors, which will soon be enacted.
IFC has contributed to the adoption of 95 corporate governance codes, laws, and regulations in more than 30 countries worldwide. IFC’s Corporate Governance Program in East Africa is funded by the State Secretariat for Economic Affairs of Switzerland.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with 2,000 businesses worldwide, we use our six decades of experience to create opportunity where it’s needed most. In FY16, our long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity. For more information, visit
About Capital Markets Authority
The CMA was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence. The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds and the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest.
SECO is Switzerland’s competence center for all core issues relating to economic policy. SECO’s economic development cooperation strives to achieve sustainable growth. Such growth is sustainable if it creates jobs, helps to increase productivity, to reduce poverty, inequalities and global risks. For more information, visit
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