NAIROBI, Kenya, Jan 7 – The Capital Markets Authority (CMA) has reported a 2 percent drop in the annual weighted overall corporate governance score for issuers of securities in the 2023/2024 financial year.
According to the seventh State of Corporate Governance report, which evaluated 52 issuers, the overall score fell from 75.71 percent (Leadership rating) in 2022/2023 to 73.56 percent (Good rating) in 2023/2024.
The decline was attributed to issuers’ non-compliance with the Corporate Governance Code principles following the enactment of the Public Offers, Listings, and Disclosures (POLD) Regulations 2023, which made adherence to the CG Code mandatory.
Despite the drop, the report highlighted improvements in three key principles: Commitment to Good Corporate Governance, Ethics and Social Responsibility, and Accountability, Risk Management, and Internal Control.
CMA noted a shift from a disclosure-based assessment to an implementation-based approach, requiring issuers to document specific initiatives to demonstrate compliance with the CG Code.
“From a Fair Rating of 55% in 2017/2018, issuers have progressed to a Good Rating of 73.56% in 2023/2024,” CMA stated.
CMA Chief Executive Officer Wyckliffe Shamiah emphasized the significance of the issuer assessment in strengthening the sector.
“This comprehensive assessment serves as a crucial roadmap for issuers, showcasing areas of excellence while identifying opportunities for improvement,” said Shamiah, adding that the findings would bolster stakeholders’ confidence in the capital markets sector.
