Effectiveness of Mwongozo Code of Corporate Governance for State Corporations in Streamlining Appointment, Compositions and Size of Boards in Parastatals in Kenya

Abstract

The Mwongozo Code of Governance issued in 2015 was in response to continued failures of State Corporations in Kenya. More than seven years have passed since The Mwongozo Code of Governance was issued, yet the issues from the past—specifically, the appointment, makeup, and size of these State Corporations' boards—remain to impede the development of these entities. This raises concerns about the effectiveness and faithfulness of the Mwongozo Code of Governance for State Corporations' implementation. The purpose of this study was to examine how well The Mwongozo Code of Governance for State Corporations is being implemented, paying particular attention to the matter of board appointment, composition, and size. This research paper’s objective was to examine the efficacy of the board of directors’ pillar and identify implementation issues, with a focus on state enterprises in Kenya. It was the finding of this study that the very challenges that Mwongozo was crafted to solve have continued to exist if not getting even worse. State corporations in Kenya face several challenges from a board and governance perspective, which if remain unaddressed, we shall continue witnessing failures of these State Corporations. The study through its recommendations aims to improve corporate governance in Kenyan state enterprises by implementing the Code more efficiently and effectively. It also reviews and recommends policy and legislative improvements which if passed by the legislatures shall ensure strict compliance with the Code and kick start progressive reforms journey towards improved governance by State Corporations in Kenya.