‘Hospitals Board Rooms are as Important as Operating Rooms’. That was the headline of a story I read in the New York Times many years ago.
The Nairobi Hospital must be rescued from the clutches of competing interests. And; the starting point should be reform of corporate governance- transparently conducted Annual General Meetings; visionary and directors that are not conflicted; and efficient management.
I gather from sources from security personnel involved in the on-going investigations by state security agencies that one of the areas the investigations are focusing on is corruption in the conduct of elections.
The investigators are tracking evidence to prove whether there has been manipulation of the membership register; vetting of those who participate in the elections and whether t certification and confirmation of quorum during elections has been happening.
Security agents claim that they have come across paper trails of fake membership of the Kenya Hospital Association; the entity that owns the hospital.
We must wait to see whether these claims are true. But the fact that issues around governance and elections are coming up should not surprise you especially if you have been following and tracking the goings- on at the hospital for a long time.
What came out clearly from the last AGM of the Kenya Hospital Association is that players with vested interests in the company; angling to capture and take control of its affairs have changed tactics.
In the past, election of directors during AGMs of the Kenya Hospital Association were conducted in a calm and placid atmosphere where most decisions and resolutions were arrived at by consensus.
Today, the elections are a do- or- die affair. Indeed, one of the most spectacular we all were an unprecedently high number of buses parked around the venue; which transported hordes members from upcountry.
The elections have become a high-stakes affair; characterised by hostile manoeuvring and unsubstantiated claims about infiltration of ethnic politics in the management of the prestigious hospital.
Today, and due machinations and manoeuvres by greedy elites; the membership register is almost bursting at the seams.
In the old days, individuals who elected on boards of associations and other such prestigious elite clubs were high profile and respected public and corporate executives and figures: men and women of character and calibre, whose only interest was to do good to society.
A friend of mine who sat on the board during those days of yore told me that directors at the hospital were not even paid allowances.
They treated service on those boards was a calling. You joined the board of Nairobi Hospital to network, make friends and to do good to society.
If you want to appreciate the gravity of the governance crisis facing Nairobi Hospital; go no further than the findings a forensic audit report that was conducted on its affairs in Ernst and Young.
Even though that report is now old; it revealed structural and in-built management problems that can only be resolved by a root and branch disruption of the governance regime at the hospital.
The forensic auditors concentrated in three four main areas; namely; vendor selection processes; vendor sourcing and evaluation; capacity in management of contracts and cash and treasury management.
Reading through the report; you find a catalogue of corrupt dealings; irregular advance payments to contractors; award of contracts without competitive bidding and cartel-like behaviour by a tiny elite of suppliers that has captured most of the lucrative contracts. Clearly, the main corporate governance challenges the Nairobi Hospital’s board is grappling are two.
First, lack of capacity in management of conflict of interest within the board. Second; failure to maintain transparent ways and systems of managing and dealing with related party transactions.
In the past, we saw cases where law firms on the panel of lawyers representing the company, were owned by board members. There were cases where among tenderers for insurance contracts were companies owned by directors.
Even though it is hardly articulated in public; it is an open secret that one of the controversies that has pitted the board into hostile camps is a protracted controversy involving procurement of a multi-million hospital management ICT system. The last time I checked; the dispute was before an arbitration panel.
Nairobi Hospital is a private entity. But we are now at a point where the company’s affairs must be subjected to public scrutiny and interrogation.
The Nairobi Hospital is a critical piece of infrastructure in our health delivery system.
The company does not pay taxes as it is a not-for profit. In my view; these not for profits must appreciate that they have a duty to demonstrate to the tax-paying public that the citizen is benefitting and getting something in return for tax exemptions we have allowed them to enjoy.
The governance of Nairobi Hospital is ripe for a major disruption.
The writer is the former Managing Editor for The EastAfrican
Unlock a world of exclusive content today!Unlock a world of exclusive content today!
