Corporate Kenya has from time to time been rocked by a succession of scandals due to governance malpractices.
These failures have seen big companies fall on hard times, with some such as was the case for Imperial Bank and Nakumatt going under. Others like Kenya Airways and Uchumi Supermarkets, which were once profitable, are now struggling to survive.
Corporate governance abuse not only erodes investor confidence in companies but also puts to question the strength and reliability of its board of directors.
A passive board relies on the executives for information. But a board with hands-on leadership will engage much more with not only the executives but also the workers. Many companies in Kenya rarely disclose reasons for sudden departures of their executives, especially over malpractices. But last week, marketing firm WPP Scangroup bucked the trend after it announced the suspension of its chief executive and finance director over alleged ethical misconduct, which it is investigating.
The bold move, which marked the first time a CEO of a Nairobi bourse-listed firm has been suspended or sacked publicly for ethical misconduct, is worth emulating to create market confidence and business integrity.