Corporate Kenya faces exodus of CEOs into govt

President Uhuru Kenyatta and Deputy President William Ruto on April 23, 2013 when they named the first four Cabinet Secretary nominees at State House, Nairobi. The nomination of Cabinet Secretaries and pending recruitment of Principal Secretaries is set to change the face of Kenya’s corporate sector. 

By A JOINT REPORT, The EastAfrican

The nomination of Cabinet Secretaries and pending recruitment of Principal Secretaries is set to change the face of Kenya’s corporate sector.

Read: EAC: Uhuru Cabinet could be gamechanger

Executives and senior managers from at least three Nairobi Securities Exchange-listed firms, an investment bank, three regulators and at least 20 well-known private companies and government entities are among those who have either been nominated to serve as Cabinet Secretaries, or shortlisted for the position of Principal Secretary in the new government.

Five of the 16 nominees for Cabinet positions are from the private sector, while 25 per cent of the 155 shortlisted candidates for Principal Secretary jobs are executives and senior managers from the private sector.

Kenyans are likely to be treated to a glimpse into the inner workings, deals and well-kept secrets in private companies as the Public Service Commission kicks off the vetting of the candidates seeking positions as PSs on Monday.

The candidates’ experience, performance record and management styles are expected to come under scrutiny during the vetting.

If the PSC lean towards private-sector bosses for the PS jobs, many firms will be looking for new managers as business leaders leave high paying jobs for public appointments.

Of the 16 nominees for Cabinet Secretary posts announced by President Uhuru Kenyatta on Wednesday, two are bank executives (Adan Mohammed, chief administrative officer of Barclays Africa, and James Macharia, CEO, NIC Bank). Another appointee, Phyllis Kandie, is currently an associate director at Standard Investment Bank while the rest have been drawn from the academic, government and private companies.

Among corporate faces on the shortlist for Principal Secretary positions are NSE-listed power distributor Kenya Power’s chief executive officer Joseph Njoroge and his chief manager for human resources and administration Ben Chumo; Betty Maina, CEO of the Kenya Association of Manufacturers, Sumayya Hassan-Athmani, the managing director of National Oil Corporation and Nancy Karigithu of the Kenya Maritime Authority.

Others are Prof Genevieve Were, Patrick Omutia, and Elizabeth Muchane, the deputy vice chancellor at Maseno University, the MD of the National Industrial Training Authority and the director of the Kenya School of Governance respectively.

The Principal Secretary shortlist also has Kenya Railways Corporation managing director Joseph Nduva Muli, Postbank managing director Dr Nyambura Koigi, Kenyatta National Hospital chief executive officer Richard Lesiyampe and Tea Board of Kenya chief executive officer Sicily Kariuki.

Regulators such as the Central Bank of Kenya, Insurance Regulatory Authority and the Dairy Board of Kenya may also find themselves looking for replacements as individuals holding key positions in those organisations have also been shortlisted. They include James Teko Lopoyetum, the director of operations and bank administration at CBK, and Sammy Makove and Machira Gichohi who are the chief executive officers at IRA and the Dairy Board.

Other individuals who have been shortlisted and work with the private sector include Kenya National Examinations Council chief executive officer Paul Wasanga and Kenya Investment Authority managing director Moses Ikiara.

Experts say those in most demand are people who are technologically literate, globally astute and capable of not only developing, but also executing strategy. This has heightened the battle for talent between government and the private sector.

 Training ground

James Wangunyu, chairman of Standard Investment Bank, said replacing Ms Kandie would be a challenge. “The industry has very few people who have her years of experience,” he noted.

For years, Kenya’s civil service has been seen as a training ground for middle-level managers who soon find themselves courted by the private sector, a trend that is quickly changing, as seen with executives leaving plum private sector jobs for State appointments.

“Some of these people leaving the private sector are driven by the need for challenge. They have achieved all they can in the private sector, so they are looking at a different challenge in the public sector,” said Patrick Mutisya, a senior human resource consultant at Manpower Services, a management firm.

Analysts said a reformed public service, better pay, and improved terms of service could help rejuvenate service delivery, with the public sector taking on private businesses in the labour market.

“Given their private sector background, their management style is likely to be more hands on than previous ministers. We are likely to see them more involved in, say, recruitment as they understand how much their personal success is tied to the competencies of their team,” said Mr Mutisya.

According to the Economic Survey 2012, private sector wages are more than double the public sector’s. In 2011, private sector wages stood at Ksh587.2 billion ($6.9 billion) compared with the private sector’s Ksh291.4 billion ($3.4 billion).

The executives’ exit from private to public sector jobs is expected to intensify the revolving door that has characterised Kenyan firms in recent months, which have seen senior managers moving in and out of company boards and top tier corporate positions, as firms seek fresh brains and strategies to drive growth.