NAIROBI, Kenya, Feb 18 – The Central Bank of Kenya (CBK) is set to vet directors of banking institutions and senior managers afresh to weed out people with questionable integrity or conflict of interest.
CBK Chairman Mohamed Nyaoga says the re-vetting has been necessitated by recent bank failures that threatened to crush confidence in Kenya’s banking system.
Nyaoga says fresh vetting, backed with strengthening of banks’ corporate governance structures, will ensure holders of board and management play their roles effectively.
Banks that have suffered recently include Dubai Bank, Chase Bank and Imperial Bank.
Chase Bank was revived almost immediately while Imperial Bank, where Sh42 billion was lost, is still under receivership. Dubai Bank was liquidated.
“Most of the banking problems we have had were related to weak corporate governance perpetuated through internal fraud,” he said.
He was speaking when he opened the Centre for Corporate Governance (CCG) Alumni Grand Reunion in Nairobi.
The Centre for Corporate Governance launched a continent-wide network of good corporate governance champions drawn from its pool of 13,184 alumni, which will ensure the transformational role of best practices is felt in various organisations.
“We must see the impact of corporate governance beyond boardrooms into the societal, national and international arena,” said Joshua Okumbe, the chief executive of CCG.
He said corporate governance has a significant impact on the strategic direction economies take, both at corporate and national levels in mobilizing and allocation of resources.
He noted that recent corporate failures in Kenya were a result of lack of best practices in governance.