Regulator to screen top executives of public firms
By - | July 19th 2012
By James Anyanzwa
The Capital Markets Authority (CMA) will vet directors and chief executive officers of listed companies to ensure compliance with corporate governance principles.
The move is part of the regulator’s efforts to protect interests of shareholders, who suffer when wrangles flare up in boardrooms.
CMA Chairman Kung’u Gatabaki said the regulator is examining structures of boards, in conjunction with institutions that offer corporate governance consultancy and relevant agencies of the Government. “The process will involve vetting of directors and CEOs of listed companies to ensure compliance with good corporate governance principles,” he said.
Ethics in firms
“We want to ensure directors of listed companies are responsible for funds entrusted to them.” Gatabaki said the regulator is duty bound to introduce a new corporate culture of business ethical behaviour.
He noted that this measure would enhance investor confidence at the Nairobi Securities Exchange (NSE).
“We aim to have good governance firmly embedded in our corporate culture particularly in sectors that have to do with investment of public funds, savings and Diaspora remittances, where trust and confidence are key ingredients, “ he said.
Gatabaki was speaking during the listing and subsequent trading of 2.1 billion shares of CIC Insurance Group at the NSE trading floor Wednesday.
The shares were listed by way of introduction on the Main Investment Market Segment at a price Sh3.50. They opened trading at Sh7 per share but climbed 10 per cent to close the trading session at Sh7.75.
Speaking during the function, President Kibaki urged insurers to develop more products targeting the masses in order to address the worrying low penetration levels of insurance in the country. Kibaki decried the low uptake of insurance products in the country, noting that the trend has been occasioned by cultural beliefs.
“I encourage Kenyans to think proactively about the future of their loved ones and take up insurance to ensure their financial security is guaranteed,” said Kibaki.
Gatabaki noted that to meet the challenges of increased demand for capital markets investment opportunities, CMA has undertaken various initiatives including drafting of two bills - CMA Bill and Investments Bill - which have already been submitted to the Ministry of Finance.
The regulator has unveiled a five-year-plan with intentions of attracting foreign capital through development of new products and improved regulations.
CMA has adopted risk-based supervision model for its market intermediaries and lined up a string of new products to cater for the diversified needs of investors.
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