State officers test law with seats on private firm boards

From Left: Margaret Kobia - PSC chair person, Nduva Muli - Transport PS and Agnes Odhiambo - Controller of Budget. FILE 

By  VICTOR JUMA

In Summary

• The number of such officers dabbling in corporate governance assignments has risen in the past year as Kenyan companies stepped up their hiring of high-profile directors hoping to ride on their influence to navigate regulatory and operational challenges.
• Britam tops the list of companies that have packed their boardrooms with influential personalities after it hired former head of civil service and Secretary to the Cabinet Francis Muthaura last week.
• The appointment of serving state officers to the boards of private corporations has raised concern over high-level exposure to conflict of interest.

At least four State officers are sitting on the boards of Nairobi Securities Exchange (NSE)-listed companies in breach of the constitutional provision barring them from participating in any other gainful employment.

The number of such officers dabbling in corporate governance assignments has risen in the past year as Kenyan companies stepped up their hiring of high-profile directors hoping to ride on their influence to navigate regulatory and operational challenges.

Investment firm Britam tops the list of companies that have packed their boardrooms with influential personalities after it hired former head of civil service and Secretary to the Cabinet Francis Muthaura last week.

Mr Muthaura — who has served in all post-independence governments except the current one — joins the Controller of Budget Agnes Odhiambo and Transport Principal Secretary Nduva Muli on the Britam board.

The list of high-profile public officials sitting on the boards of private companies includes Public Service
Commission chairperson Margaret Kobia who was tapped to the Sameer Africa board early this month, the chairperson of Salaries and Remuneration Commission Sarah Serem who sits on the Mumias Sugar board and the general manager of Export Promotion Council (EPC) Lucy Waithaka who chairs Eveready East Africa and sits on the board of Sasini.

READ: Sameer appoints public service head to its board

Also in the race for highly connected directors are Seven Seas Technology, which has tapped former Solicitor-General Wanjuki Muchemi to chair its board, Athi River Mining and Liberty Holdings that have former Capital Markets Authority chief executive Stella Kilonzo on their boards.

But the appointment of serving state officers to the boards of private corporations has raised concern over high-level exposure to conflict of interest and influence peddling that come with the directorships.

The appointment of state officers to the boards of non-state firms has particularly turned the spot-light on the Ethics and Anti-Corruption Commission (EACC) – the agency charged with ensuring that public officers live within the constitutional demands on integrity. 

Article 77 of the Constitution bars full-time State officers from participating in any other gainful employment.

Though some of the State officers sitting in private company boards have argued that the threshold for taking up such an appointment is the presence of the risk conflict of interest, Mumo Matemu who chairs the anti-corruption agency was categorical that the appointments are in breach of the Constitution.

“The Constitution is clear that state officers cannot participate in any other gainful employment. Those breaching the law risk losing their positions among other remedial actions,” Mr Matemu said.

His position was supported by Kamotho Waiganjo, who serves in the Commission for the Implementation of the Constitution (CIC).

“The law is clear that all state officers, including independent office holders and members of constitutional commissions, cannot take up any other gainful employment,” said Mr Waiganjo.

Directors of private companies earn millions of shillings in board emoluments, amounting to gainful employment.