Housing Finance taps new director to meet CBK quota

Ms Gladys Ogallo has been appointed non-executive director to the Housing Finance board. Photo/FILE 

By DAVID HERBLING

In Summary

• The firm Wednesday said it had appointed Gladys Ogallo, managing director of Virtual Human Resources, a non-executive director following Central Bank of Kenya’s approval on January 8.
• Ms Ogallo is the sole female director in Housing Finance’s eight-member board which is dominated by representatives of its principal shareholders including the National Social Security Fund (NSSF), Britam and Equity Bank.
• The home loans provider needs to recruit two more independent directors given that it has opted not to replace its current board members.

Housing Finance has appointed a human resource expert to its board as the mortgage provider taps new directors to meet governance rules that may reduce the influence of Equity Bank in the company.

The firm Wednesday said it had appointed Gladys Ogallo, managing director of Virtual Human Resources, a non-executive director following Central Bank of Kenya’s approval on January 8.

Ms Ogallo is the sole female director in Housing Finance’s eight-member board which is dominated by representatives of its principal shareholders including the National Social Security Fund (NSSF), Britam and Equity Bank.

READ: HF moves to cut Equity Bank sway in its boardroom

One-third threshold

Central Bank of Kenya (CBK) has given lenders until June to ensure that at least a third of board seats are held by independent directors.

The banking regulator defines an independent director as a board member who is not a direct or indirect representative of the principal shareholders, has not worked in the bank as an executive for the past five years and has not had any business relationships with the institution in the same period.

Housing Finance is one of the banks that have not met the one-third threshold given that its seven-member board only has one director who qualifies as independent based on the CBK definition.

The home loans provider needs to recruit two more independent directors given that it has opted not to replace its current board members.

“We have started the recruitment of additional non-executive directors in line with CBK requirements,” Housing Finance CEO Frank Ireri told the Business Daily last week.

Significant suppliers of the lenders or relatives of senior managers and those with a direct or indirect shareholding of more than five per cent in the appointing banks are also not considered independent.

Equity owns 24.9 per cent of Housing Finance while Britam and NSSF control 21.4 per cent and 6.81 per cent of the mortgage firm.

Their representatives have dominated the board of the home loans provider.

Equity directors Peter Munga, David Ansel, Shem Migot-Adholla and Benson Wairegi (the CEO of Britam) sit in the board of Housing Finance.

New regulations