Spell out future strategies to investors – expert

May 16, 2013
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, NAIROBI, Kenya, May 16 – Local financial regulators have been challenged to come up with a specific policy that will push companies to prove their sustainability and help Kenyans make proper decisions before they invest in them.

Chairman of the King committee on corporate governance in South Africa Professor Mervin King says local investors and shareholders of companies are only given financial statements on the performance of the companies which do not include much of what they would want to hear.

King who is in Nairobi told Capital FM Business that the old trend has led to many shareholders of companies’ lose a lot of money when the firms become bankrupt or are in financial difficulties.

“You as the leader of any firm should have a duty to explain tangible future strategies of the company and assure that it will still be in business when they retire,” Prof King emphasised, “but with the financial reports alone the companies are used to giving, they cannot be able to tell that the company will be there in the next 40 years.”

He says an agreed policy on the issue would lead to many companies being honest and more open on the future strategies they have not only in terms of their financial sustainability to shareholders but assure quality service to the biggest stakeholder who is the consumer.

“Consumers also want to know that despite the company being in business; it is also concerned about their welfare by maybe ensuring less harmful products, environmental concern in terms of emissions and waste management, social corporate responsibilities that are not just for advertising purposes,” he challenged.

“Shareholders are not really excited about how much money the company made, but the returns they will get and for how long.”

He said there is need for an integrated and inclusive approach in what he termed as good corporate governance which will help key stakeholders of a company feel included by getting the desired

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