By Macharia Kamau

NAIROBI, KENYA: Kenya has in the recent past been treated to boardroom theatrics that have exposed an unsavoury side to otherwise glamorous corporate wars.

The power tussle has in many instances pitted board of directors against senior management, with chairmen working hard to overshadow their chief executives. Many talented managing directors have been overshadowed by their board chairs to a point that they are left hanging in the background clueless, while others have opted out.

A worrisome issue that emerged prominently in an interview with a number of captains of industries was overbearing board chairmen, a tradition that is prevalent in the country’s business community, especially among State corporations.

The corporate leaders, drawn from different sectors, took turns to analyse how cling-on attitude of chairmen and undue interference in management decisions.

Youth Enterprise Development Fund is the latest victim to an almighty chair. The institution that manages Sh3.8 billion revolving kitty that is meant to lend to youth-led enterprises has in the recent months seen the board of directors assume active executive role.

The board led by Evans Gor Semelang’o is alleged to be running the show at the Youth Fund. Appointed as chair of YEDF in January this year, Semelang’o is reported to be giving instructions to different officials at the Fund, many of them without knowledge and even consultation with the Fund’s senior management.

Interference by the board is not new with Semelang’o but it is something that is entrenched within the Fund’s board. Two reports – one by the Efficiency Monitoring Unit and another by an independent management consultant hired by the Fund – released in the course of 2012 point out that the board is too involved in the daily operations of the Fund.

There has been discontent from within the Fund, with the management finding the chairman’s day-to-day involvement a bit too much for comfort.

“Dealing with officers directly is undermining authority of the CEO’s office and this will give rise to the sabotage of the management... on several occasions, officers at the Fund have been instructed by the chairman,” said an insider who declined to be named.

The emerging complaint, however, gives a glimpse into the overbearing nature of the board, even before Semelang’o was appointed the chair. Two reports – one by the Efficiency Monitoring Unit and another by an independent management consultant Mucmar Consultants – show that board members have always had a heavy hand in daily running of the Fund.

Of the two, the EMU report is the damning and recommends the disbanding of the board of directors running the Fund, claiming the board has failed in its oversight mandate that has resulted in the gross mismanagement of the Fund’s resources. This includes inappropriate use of money in the YEDF revolving kitty, which the Fund is supposed to manage and lend to youth-led enterprises.

“The minister of Youth Affairs and Sports immediately reconstitutes the current Board for its failure to effectively execute its mandate leading to massive mismanagement at the Fund by the management and its staff.

“The minister takes appropriate action against the current board of directors, chief executive officer and his management team for their failure to ensure that the Board’s funds were lawfully utilised after authorisation in an effective, efficient, economical and transparent manner.”

In its audit of the Fund’s activities, EMU found out that the allowances paid to board members had in just one year shot up by over 310 per cent to Sh28 million in 2010/2011 financial year compared to Sh6 million in 2009/2010 year.

The team that audited the Fund’s accounts blamed to rise to the heavy involvement in the running of YEDF by the board.

“The high allowances paid to some board members can be attributed to the fact that they might have been highly involved in the day-to-day activities of the Fund. Further, an analysis of the Full Board and Committee meetings revealed that some Board members were members of most of the committees.