Press Release


CMA Publishes First State of Corporate Governance Report

Nairobi, 06 February, 2019… The Capital Markets Authority (CMA) has published the first State of Corporate Governance Report based on an assessment of 56 issuers of securities to the public in 2017/18. The report is aimed at raising visibility of the state of corporate governance of issuers of securities to the public in Kenya in order to empower investors and respective boards to encourage continuous improvement in practices.

The report follows the evaluation of the first set of regulatory reports submitted in accordance with the Code of Corporate Governance Practices for Issuers of Securities to the Public, 2015 (the Code), which became effective in March 2017. The Code sets out the principles and specific recommendations on the structures and processes which issuers should adopt in making good corporate governance an integral part of their business dealings and culture.

To facilitate the Code’s goals, and in consultation with stakeholders including issuers, CMA developed offsite self-evaluation tools together with a scorecard methodology for reporting, measuring and monitoring the application of the Code. The corporate governance reporting template serves to enhance adherence to corporate governance requirements and disclosure of the status of each issuer’s application of the respective requirements. The corporate governance scorecard is assessed internally by the Authority to inform engagement with the reporting issuers and the development of market-wide trend analysis through the State of Corporate Governance Report.

Issuers were required to submit the completed reporting templates together with the complete set of annual reports within four months following the end of their financial year. The submitted templates for the financial year 2017 were individually assessed and rated based on information which is publicly available to shareholders and potential investors. Thereafter, CMA shared feedback with every issuer detailing their strengths and areas for improvement.

The CMA Chief Executive, Mr Paul Muthaura, noted, ‘’the 55 percent overall score compares favourably with other jurisdictions around the world. Comparatively, the Association of South-East Asian (ASEAN) countries developed a corporate governance report on the countries in the association which indicated that Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam scored 43 percent, 62 percent, 49 percent, 56 percent, 68 percent and 28 percent respectively in 2012 when the public companies in these countries were first assessed. The public companies assessed under the ASEAN Corporate Governance initiative have since shown significant improvement in adopting good corporate governance best practices’’.

Mr Muthaura acknowledged that the 55 percent average score was a good starting point in the assessment of issuers on their application of corporate governance principles. The best implemented principles were those relating to, “commitment to good governance”, “accountability, risk management & internal control” and “rights of shareholders” with a combined total of 22 issuers in leadership positions. The report aims at encouraging issuers of securities to become model corporate citizens by adopting and fully implementing the Code and related corporate governance laws, standards and practices.

Mr Muthaura said that in line with the relevant laws, the Authority has engaged all the issuers who have been assessed during the development on its findings prior to the publication of the Report. This engagement is evidenced by a feedback statement from those consultations also published on the Authority’s website.

Going forward, the Authority will seek to continually improve, and where appropriate, refine its assessment of the quality and improvement of corporate governance practices of individual issuers against the Code and other globally accepted corporate governance standards. In this regard, both the Corporate Governance Reporting Template and the Scorecard will be refined to provide a responsive basis for such a dynamic review and comparison within the Kenyan context. The Authority will continuously provide feedback to the respective issuers at the end of every assessment to enhance and deepen good corporate governance practices in Kenya. The report is available on the CMA website,



The Capital Markets Authority (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 & 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. For more information, please contact: Antony Mwangi, Head of Corporate Communications on This email address is being protected from spambots. You need JavaScript enabled to view it..

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