Control and enforcement of corporate governance by the capital markets authority (CMA)
Abstract
Corporate governance has been a term not quite understood. Many people appreciate its
importance having experienced the effect of the lack of it as opposed to the presence of it. This
research tries to understand the meaning of corporate governance and why it is important for
control and enforcement in corporations by the Capital Markets Authority, the body mandated
to regulate public listed companies. The context of the study is the companies listed at the
Nairobi Stock Exchange, very important because of the role they play in attracting public funds
(aswell as foreign) capital for longer investment purposes.
The research looks at the functions of CMA and its role in controlling and enforcement of
corporate governance throug,h powers bestowed through legislation. The study looks at
scholarly views on the concept and how it is practiced in the major economies including the
Unites States and Great Britain. It then borrows a leaf from the King's report on corporate
governance and suggests how the seven characteristics can be applied in the Kenyan context. A
survey on the significance of practicing corporate governance in corporations is also captured
with emphasis on aspects of corporate governance they consider important. The case study is
then undertaken to determine whether CMA actually undertakes control and enforcement of
the corporate governance on the companies listed at the NSE.
The data collected and analyzed suggested that the Authority has put in place various measures
. a~
and reporting requirements for listed companies which essentially as a guideline. Control and . A
enforcement of the guidelines is effected through various means including use of fines and
penalties. There is, however, varying levels of control and enforcement of the guidelines against
the prescribed measures. The research, however, found that the Authority is undergoing a lot
of reforms which are geared to see a more firm control and enforcement framework backed by
legislation.
Citation
Masters of business administrationSponsorhip
University of NairobiPublisher
School of business,University of Nairobi