International Journal of Humanities and Social Science

ISSN 2220-8488 (Print), 2221-0989 (Online) 10.30845/ijhss

Kenya’s Legal and Regulatory Framework on the Appointment of Board of Directors (BOD) for State Owned Enterprises (SOE) and Its Effectiveness
Elijah Njagi Ireri (LLM)

This article evaluates the legal and regulatory framework for the appointment of BOD for SOE in Kenya. In addition to that the composition and factors that influence the appointment of boards other than legal provisions such as politics, gender and diversity will be investigated. This will be done against the background that the provisions of the Constitution of Kenya 2010, if fully implemented would reshape the existing framework on the directors’ appointments. This is pursuant to its provisions on the values and principles of public service articulated in chapter 6 on leadership and integrity, Articles 10 on national values and principles of governance and Article 232 on values and principles of public service. SOE have performed dismally in Kenya over the last few decades and this is attributed to poor corporate governance and especially the poor appointment procedure of BOD. Measured against some of the well performing SOE, the calibre of those appointed to steer the BOD determines the success or otherwise of SOEs. Although SOE play a very significant role in the economic development of the country, they have become fertile ground for political patronage, tribalism, cronyism and a place where retired, rejected and non performing civil servants find soft landing. “The tragedy in Kenya is that those who have mismanaged the Government, the developmental finance institutions, and even state corporations are those who continue to circulate in and out of Government as Ministers, Assistant Ministers, and advisers and so on.” However the appointment procedure of BOD for SOE was characterised by political considerations, controlled by the Office of the President, regulated by various laws that were not harmonized and the absence of clear guidelines on determining the experience, integrity or academic qualifications for those to be appointed.

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