Kenya: Firms Go Mute on Investor Rights Despite Increased

Kenya: Firms Go Mute on Investor Rights Despite Increased

Every aspect of our lives involves dependence on principles and ethical practices. For example, our expectations are that we get value for our money.

When we exchange money for goods and services, we expect fair practice from financial institutions and patient confidentiality from doctors. It is undeniable that trustworthiness is the most valuable and definitive resource that all establishments strive to build with various stakeholders. Trust and credibility can be seen as the primary foundation that enables businesses and organisations to recover and emerge.

While the primary objectives of business will be productivity and profitability, leaders should have a solid basis of ethics, integrity and morals. If the corporate leaders themselves are found lacking, the workforce will almost certainly reflect the ethos of its leadership.

Stakeholders expect management and staff of organisations to practice honesty, integrity, competency and accountability. In the view of the stakeholders, how are organisations faring on this front?

As per the Edelman Trust Barometer, which measures trust as a function of competence and ethics, the report indicates that the average Kenyans faith and trust, particularly in chief executives, to do what is right for the stakeholders and society has declined by four percent from 52 percent in 2020 to 48 percent in 2021.

Investor assurance has changed over time, causing significant consequences for financial markets. For the shareholder, a company’s dividend payout policy is of primary importance. Investors, especially long-term, pump in money purely for returns.

Policy statements

Clear dividend policy statements help investors ascertain, strategise and target safe investment or reinvestment for optimal returns. Certain Nairobi Securities Exchange listed companies with a history of good dividend yields and payouts based on their earnings per share have cited the pandemic as a reason for low revenues and issued nil or low dividends this year, despite making noticeable profits.

It is important for the management of these firms to issue a public statement of when a return to earlier dividend levels would take place. With the share prices declining, already bulked up reserves increasing and a holding back on dividends, investors are being dealt a losing hand.

Would it not be a better strategy to use better dividend payout as a tool to encourage and attract both local and international investors? Some companies in a bid to trim costs are retrenching staff while showing increments in director’s salaries. What message is being sent to the various stakeholders?

What misrepresented expenses are being reported? Certain […]

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.

Leave a Reply