Kenyans to take control of Safaricom board in changes

Macharia Kamau  Vodafone Kenya currently has the majority seats on the Safaricom board at four. [Courtesy] Safaricom shareholders will at the end of this month vote on a proposal by the telco that if passed will guarantee Kenyans more seats on the board.

 The move comes in the wake of a raging debate on whether a Kenyan should succeed the late Bob Collymore as the mobile service provider’s chief executive. Collymore succumbed to cancer last
month, which saw the telco’s former boss and current Kenya Airways Chairman Michael Joseph appointed as interim chief executive. If the proposal sails through, the board will be made up of six Kenyans of the 11 directors. There has been a push and pull between the major shareholders of the company – the Kenyan Government and Vodafone Kenya (owned by Vodacom of South Africa and Vodafone of UK) – on Collymore’s successor, with the former expressing its preference for a Kenyan. Joseph, Safaricom’s first CEO, has both Kenyan and American citizenship while Guyanese-born Collymore also had dual Kenyan and British citizenship. In a notice to shareholders to attend the Annual General Meeting scheduled for August 30, Safaricom proposes to change the Company’s Articles of Association to increase the number of seats on its board to 11 from the current 10. The telco said in the notice the majority of its directors would be Kenya. The Articles of Association say the company will have a minimum seven directors while 11 will be the maximum. “Unless and until otherwise from time to time determined by a special resolution of the company, the number of directors (excluding alternates) shall not be less than seven (7) nor more than eleven (11) in number and shall include independent non-executive directors a majority of who shall be of Kenyan citizenship,” reads the announcement to shareholders in part. Of the current 10 directors on the Safaricom board, three represent the Kenyan Government that has a 35 per cent shareholding and another two (both Kenyans) are independent directors, representing interests of the minority shareholders (25 per cent stake). Vodafone (40 per cent shareholding) has a maximum of four board seats, according to the firm’s articles and has appointed different nationals as directors, including Joseph – a Kenyan-American. The company made Sh63.4 billion in net profit during the year to March 2019, which was 14.7 per cent higher compared to the previous year. Among the products that it launched during the year include Fuliza, its mobile overdraft facility, which has been a runaway success. In the five months between January when it was launched and May, Safaricom had advanced Sh45 billion to different customers. “The facility has been a resounding success, pointing to the power of data-driven, the insights-led innovation,” said the firm in its annual report.