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Lack of company secretaries linked to corporate woes
Outgoing Chairman of the Institute of Certified Public Secretaries of Kenya (ICPSK) Joe Mwangi Mbuthia (right) congratulates Catherine Musakali (left) after she was elected the new chairperson during the ICPSK 21st Annual General Meeting in Nairobi May 4, 2012. Musakali, says that failure to use certified public secretaries was at the heart of poor corporate governance in companies, including conflict of interest at the board level.
What you need to know:
The COG awards are preceded by an audit of the governance of participating companies. Companies have to sign a confidentiality agreement to ensure the information collected is only used for the purpose.
An association of professionals has blamed rising cases of poor corporate governance on failure to tap services of company secretaries as required by law.
The Institute of Certified Public Secretaries of Kenya (ICPSK) said 60 per cent of the 600,000 companies in the country do not use the services, which can be offered by a consultant or on a full-time basis, because they consider them expensive.
“Only about 40 per cent of the companies at the Registrar General’s office have a company secretary or engage the service of one.
When they file annual returns, they will realise that this can’t be accepted without services of a certified member of the institute,” said ICPSK CEO Joshua Wambua.
He spoke at the Hilton Hotel in Nairobi yesterday while briefing journalists on an upcoming gala night for the Champion of Corporate Governance (COG) awards.
The institute’s chairperson, Catherine Musakali, said that failure to use certified public secretaries was at the heart of poor corporate governance in companies, including conflict of interest at the board level.
She said that company secretaries keep the board informed on best practices in corporate governance.
“You don’t have to employ a company secretary full-time. You can hire the services of one from firms that offer these services,” said Ms Musakali.
Under the Constitution, each county will be required to have three company secretaries to drive corporate governance.
The institute has 2,600 members. The awards have attracted 45 organisations, both public and private, up from 33 last year and 16 in 2010. They were launched in 2010.
“Since we launched the awards, we have seen some companies tell us that they would like to put their house in order first before they participate. This shows that the award has had impact,” said Mr Wambua. Medium-sized NIC Bank, whose single largest shareholder is the family of the late Philip Ndegwa who once served as the governor of the Central Bank of Kenya, won the award in the past two years.
The COG awards are preceded by an audit of the governance of participating companies. Companies have to sign a confidentiality agreement to ensure the information collected is only used for the purpose.
