More than half of directors face exit in parastatal reforms

Mr Abdikadir Mohammed, the chairman of the State House-based taskforce on parastatal reforms. The team has set high academic qualifications for CEOs and directors of State corporations in its report. FILE

By MUGAMBI MUTEGI
IN SUMMARY
Qualifications, term limits and experience to oust up to half of serving members.
Chairmen of state corporations will also be required to have served a minimum term of five years in senior management.
Chief executives of state-owned firms will require a Master’s degree to remain in office.

RELATED STORIES
Parastatal reforms to oust more than half of directors


The taskforce on parastatal reforms has set new standards for directorship in State-owned firms that if adopted will oust more than half of the current board chairs and terminate the services of up to one third of directors.

The State House-based team has proposed that all chairmen of State corporation boards must have at least a master’s degree and up to 10 years’ experience in a relevant field, applying academic qualifications on directorships for the very first time.

If President Uhuru Kenyatta implements the taskforce’s proposals, all chairmen of state corporations will also be required to have served a minimum term of five years in senior management, setting up three pillars of qualification that more than half of the current occupants of the coveted seats are unlikely to meet.

Kenya Power, GDC and CCK top the list of boards that may be affected by the new requirements.

One will need a Bachelor’s degree, be a member of a professional body and have served in a senior management position for a minimum of six years to serve as a non-executive director in a state firm.

Chief executives of state-owned firms will also require a Master’s degree to remain in office, be a member of a professional body, have 10 years’ experience in a relevant field and minimum of five years in senior management.

The proposals further bar any person who has worked with a state corporation in the past five years from sitting on its board.

“There is no single generic legislation that governs the recruitment and appointment procedures and processes leading to conflicting provisions and lack of clarity, which undermines the operational effectiveness of government-owned entities (GOE),” the report.

This, it says, has opened the space for political and self-interested meddling in the appointment and recruitment of boards and executives, culminating to a serious lack of the necessary mix of skills and talent on the boards.

Some analysts described the proposed changes as long overdue, saying lack of professionalism is among the key reasons many state-owned firms have underperformed.

“Any reform measures that are meant to professionalise the operation of these bodies are welcome and long overdue. It is important to have the right people in key positions before we can realistically demand productivity,” said Joseph Kieyah, a principal analyst at Kenya Institute for Public Policy Research and Analysis (KIPPRA).

The taskforce’s report not only highlights the rudderless manner in which parastatals are run but also notes that good corporate governance practices are the first step towards salvaging the agencies some of which are “shells of their former selves.”

Successive regimes have exploited the legal gap in the hiring of parastatal executives and staff to appoint cronies and politically correct individuals irrespective of their academic qualifications, experience and suitability for the job.

As the law stands, the President or Cabinet secretaries enjoy sweeping powers over the appointment of directors and top executives of state firms.

Intense lobbying for these positions is the reason key institutions such as the National Hospital Insurance Fund (NHIF) have had an abnormally high turnover of top management.