The Failure of Corporate Governance in State Owned Enterprises and the Need for Restructured Governance in Fully and Partially Privatized Enterprises: The Case of Kenya

This Article argues that the initiatives adopted in order to make parastatals more efficient are inadequate and will not realize the intended objectives unless the chief executives of parastatals are hired on a competitive basis, given more autonomy and the government is committed not only to designing performance contracts that set realistic standards, but also enforcing them strictly. It also contends that there is a need to streamline the multiple regulations that govern parastatals and reform the corporate regulatory framework of the private sector in order to raise standards of corporate governance and, as a result, ensure that the privatized services are managed prudently

Disqualification of Company Directors: Safeguarding the Public Interest in the Kenyan Investment Market

Over the last two decades, Africa has gone through tremendous economic transformation. It was only in 2004 when the Prime Minister for the UK, Tony Blair, described Africa as the “scar on the conscience of the world” when he was establishing the Commission for Africa. A decade later, he described Africa as “the most exciting continent on the planet because of its opportunities.” Within less than twenty years, the continent has become the world’s most rapidly growing economic region. This economic growth has been attributed largely to the active private sector. Kenya, for example, has realized the highest growth rate in the East African region due to its private sector, which makes a major contribution to the country’s GDP. For this growth rate to continue, African countries need to create competitive legal frameworks that continue to attract investors and protect their interests.One of such is the disqualification framework for company directors that seeks to protect the public by placing a prohibition on a miscreant director from being involved, for a specific period, in the management of companies. An efficient disqualification framework also prevents people without the necessary qualifications from managing companies and deters those who might be tempted to engage in fraudulent activities. Without a strict disqualification framework, investors are unlikely to be attracted to a country, as they risk losing their investments when their companies are managed by incompetent, negligent, or fraudulent directors, especially those with a track record of mismanaging other companies. This philosophy was captured clearly by the Kenyan Government when it enacted the Companies Act 2015 and stated that one of its key objectives was to facilitate commerce, industry, and other socio-economic activities.  It is against this backdrop that this Article examines whether the disqualification framework under the Companies Act 2015 is adequate to protect the interests of investors. This framework is contrasted with the one that existed under the repealed Companies Act 1962 with a view to assessing whether the reforms are likely to bring about the desired changes.

Combating insider trading in Kenya’s capital markets: challenges and opportunities for reform

A paper submitted in partial fulfilment of the requirements of the Master of Laws (Public Finance and Financial Services Law) degree.The capital markets are expected to play a pivotal role in the attainment of Kenya’s development blueprint ‘vision 2030.’ It is, therefore, essential that obstacles to the attainment of a fair and efficient market are examined and rooted out. This study investigates the limitations of the Capital Markets Act in combating insider trading. It also examines whether reforms would promote a fair and efficient capital market. The study makes use of existing literature as well as decided cases to investigate the inadequacies in the formulation of and provisions for inside information, material pricesensitive information, publication of information, possession of information and disclosure of information in the Capital Markets Act. This literature draws out key learnings from other jurisdictions and analyses how legislation in developed economies treats challenges to the enforcement of insider trading laws. The doctrinal analysis is triangulated with results of a survey of practical experiences of legal practitioners in applying the Capital Markets Act. The findings affirm the existence of conceptual difficulties in determining the elements of the crime of insider trading. As a consequence, it is concluded that the present formulation of insider trading law is inadequate. The study, therefore, makes suggestions for reforms to the provisions on insider trading in the Capital Markets Act.The capital markets are expected to play a pivotal role in the attainment of Kenya’s development blueprint ‘vision 2030.’ It is, therefore, essential that obstacles to the attainment of a fair and efficient market are examined and rooted out. This study investigates the limitations of the Capital Markets Act in combating insider trading. It also examines whether reforms would promote a fair and efficient capital market. The study makes use of existing literature as well as decided cases to investigate the inadequacies in the formulation of and provisions for inside information, material pricesensitive information, publication of information, possession of information and disclosure of information in the Capital Markets Act. This literature draws out key learnings from other jurisdictions and analyses how legislation in developed economies treats challenges to the enforcement of insider trading laws. The doctrinal analysis is triangulated with results of a survey of practical experiences of legal practitioners in applying the Capital Markets Act. The findings affirm the existence of conceptual difficulties in determining the elements of the crime of insider trading. As a consequence, it is concluded that the present formulation of insider trading law is inadequate. The study, therefore, makes suggestions for reforms to the provisions on insider trading in the Capital Markets Act

Participatory Community Nutrition Education: training manual for community health workers

This manual has been developed based on participatory workshops and subsequent agri-nutrition training courses in Vihiga County, Western Kenya by the Alliance of Bioversity International and CIAT. This manual was further evaluated in Turkana and Busia Counties in Kenya, with the intention to develop agricultural interventions to improve nutrition. The learning objectives for the training are focused on: (1) basic principles of nutrition; (2) a life-cycle approach to nutrition; (3) home gardening; (4) use of underutilized crops to diversify diets; and (5) a practical cooking demonstration session

Reforming the Duties of Directors under Kenyan Company Law: A Critique

Company law plays a critical role in promoting commerce, industry, and other socioeconomic activities in a country. Apart from being a key driver for attracting investments in a country, it also provides a mechanism for prudent internal regulation of business. This article examines whether the framework for regulating the duties of directors under the Kenyan company law is adequate to protect the interests of investors and promote enterprise. The article examines how the interests of investors are protected by the codification of fiduciary duties as well as the duties of skill and care, enforcement of directors’ liability, and the disqualification regime for directors. It also makes suggestions for reform which, if adopted, would make the regulatory framework for directors more efficient.</jats:p

The Failure of Corporate Governance in State Owned Enterprises and the Need for Restructured Governance in Fully and Partially Privatized Enterprises: The Case of Kenya

This Article argues that the initiatives adopted in order to make parastatals more efficient are inadequate and will not realize the intended objectives unless the chief executives of parastatals are hired on a competitive basis, given more autonomy and the government is committed not only to designing performance contracts that set realistic standards, but also enforcing them strictly. It also contends that there is a need to streamline the multiple regulations that govern parastatals and reform the corporate regulatory framework of the private sector in order to raise standards of corporate governance and, as a result, ensure that the privatized services are managed prudently

Disqualification of company directors in Kenya

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Disqualification of Company Directors: Safeguarding the Public Interest in the Kenyan Investment Market

Over the last two decades, Africa has gone through tremendous economic transformation. It was only in 2004 when the Prime Minister for the UK, Tony Blair, described Africa as the “scar on the conscience of the world” when he was establishing the Commission for Africa. A decade later, he described Africa as “the most exciting continent on the planet because of its opportunities.” Within less than twenty years, the continent has become the world’s most rapidly growing economic region. This economic growth has been attributed largely to the active private sector. Kenya, for example, has realized the highest growth rate in the East African region due to its private sector, which makes a major contribution to the country’s GDP. For this growth rate to continue, African countries need to create competitive legal frameworks that continue to attract investors and protect their interests.One of such is the disqualification framework for company directors that seeks to protect the public by placing a prohibition on a miscreant director from being involved, for a specific period, in the management of companies. An efficient disqualification framework also prevents people without the necessary qualifications from managing companies and deters those who might be tempted to engage in fraudulent activities. Without a strict disqualification framework, investors are unlikely to be attracted to a country, as they risk losing their investments when their companies are managed by incompetent, negligent, or fraudulent directors, especially those with a track record of mismanaging other companies. This philosophy was captured clearly by the Kenyan Government when it enacted the Companies Act 2015 and stated that one of its key objectives was to facilitate commerce, industry, and other socio-economic activities.  It is against this backdrop that this Article examines whether the disqualification framework under the Companies Act 2015 is adequate to protect the interests of investors. This framework is contrasted with the one that existed under the repealed Companies Act 1962 with a view to assessing whether the reforms are likely to bring about the desired changes. </jats:p

The Kenyan regulation of company directors: an analytical study

A thesis submitted in partial fulfilment of the requirements of the University of Wolverhampton for the degree of Doctor of PhilosophyAs a former colony of the UK, Kenya inherited its current regulatory framework of directors from the UK. Since the regulatory framework was inherited, it has not been modified in any way to reflect the circumstances of the country. This thesis assesses the suitability of the current regulatory framework of directors to Kenya by examining the extent to which the regulation of directors facilitates commercial activity and enables delivery of benefits to companies. This is assessed by analysing whether: • The rules properly regulate the key relationship between directors and shareholders. • The rules are easy to understand. • Important areas of general law should be codified. • Company directors should have non-statutory guidance to their duties and responsibilities. • Directors are properly appointed; directors have regard for their duties. • Shareholders have adequate means of enforcing liability against miscreant directors. • Self-regulation by directors would be effective. • There are enough safeguards to regulate directors of parastatals.1 • The current disqualification regime in Kenya is effective. This thesis demonstrates that the Kenyan regulatory framework relating to directors is weak, outdated, and a morass of complexity which causes much uncertainty. This thesis establishes: the objectives of commercial laws still exist from colonial times and, thus, do not conform with the present day's commercial activities; the power of shareholders to control directors is minimal; the ineffectiveness of local and international regulatory framework of directors has affected the performance of companies; corruption affects the well-being of both corporate entities and the economy of the country; the application of subjective rather than objective standards to assess the liability of directors is ineffective; the corporate and collective nature of the company makes it difficult for shareholders to enforce liability against errant directors; that parastatals have performed poorly due to inadequate managerial performance of directors; the disqualification regime needs to be more stringent in order to deter miscreant directors. It is the contention of this thesis that reforms of the current regulations are required in order to achieve a framework which is modern, effective, transparent, straightforward and easy to understand. Whilst it seeks to make recommendations for a regulatory framework tailored to local circumstances, it also draws from developments in the UK and other Commonwealth countries, which would facilitate enterprise, fair dealing, accountability, balance the interests of business with those of shareholders and stakeholders, and contribute to the growth of the national economy