Corporate governance practices by Kenya Airways Limited

Abstract

The collapse of major corporates across the world like Ansett Airlines, Retailer Harris Scarfe, Enron and WorldCom has triggered a global consciousness to clear out the problem of governance. Since the collapses in Australia there has been increased focus on disclosure and the independence of auditors and directors and the need for the board to act in the best interests of the stakeholders, not themselves. A study by Lockhart and Taitoko (2005) examined causes surrounding the collapse of Ansett Holdings Ltd and the largest corporate loss of Air New Zealand, which they attributed to a failure of governance to act in the organization’s (stakeholders) interests. It is against this background that this paper investigates corporate governance practices within Kenya Airways Limited. Data was collected through interview guide from directors and senior managers in Kenya Airways Limited. The results of the research established that Corporate Board and management of Kenya Airways Limited practices acceptable corporate governance practices. The study also established that Board of Directors roles, accountability and responsibilities are clearly defined, and the Board composition is based on expertise, experience and knowledge of the industry. The study also found out that Kenya Airways have three board committees which are independent and their responsibilities are clearly defined making them discharge their mandates effectively.