Kilonzo appointment to boost market confidence

July 16, 2008

, NAIROBI, July 16 – Confidence is expected to return to the financial markets with the appointment of a Chief Executive Officer for the Capital Markets Authority.

The naming of Stella Kilonzo has ended months of speculation over the position since former CEO Edward Ntalami stepped down late last year.

President Mwai Kibaki on Tuesday confirmed Kilonzo who has been at the helm of the CMA in an acting capacity for close to seven months.

Early this month, the Nairobi Stock Exchange board of directors renewed Chris Mwebesa’s contract as CEO for another three-year term, ending months of speculation over the position since his contract expired in February.
The re-appointment came shortly after the exit of immediate former NSE chairman, Jimnah Mbaru, who was replaced by James Wangunyu.

The CMA chief executive is a presidential appointee, while the NSE chief executive\’s appointment is done by the NSE board of directors.

Former CMA chief executive Edward Ntalami quit his position in December last year, with former legal and compliance manager Stella Kilonzo holding the office in an acting capacity since then.

The number of Kenyans holding investment accounts at the bourse has soared to an estimated 1.5 million while market capitalisation has crossed the Sh1 trillion mark, making the capital markets a focal economic sector.

An attempt to recruit a new CMA boss by the recruitment firm, Hawkins Associates, flopped in March under unexplained circumstances.
Mwebesa was at one time considered a front runner for the CMA CEO’s job.

Kilonzo, is a CMA board appointee – a situation that critics argue makes her prone to manipulation by board members to whom she is answerable.

Among the issues that had dominated debate prior to this announcement of the CMA CEO included a more competitive package for the candidate.

Former NSE chairman Jimnah Mbaru\’s was one time quoted as holding the  view, that  the salary of the future CEO of the securities regulator should be in the region of Sh2 to Sh3 million a month, up from an estimated Sh500,000 per month, a measly package by market standards.

Mbaru  further suggested that the CMA chief executive should be viewed in the same light as that of the Central Bank Governor and the Kenya Anti Corruption czar, who take home an estimated salary of over Sh2 million.

Mbaru said the board would be in a better position to be able to attract top-notch candidates who are already or in line to become CEOs of major businesses locally.

Equally most candidates and business leaders at the time felt that the board should have headhunted the candidate or used a combination of both.

It’s not clear yet whether these proposals were considered before confirming Kilonzo as the new CMA boss.

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