IFC, a member of the World Bank Group, and Kenya’s Capital Markets Authority (CMA) have signed an agreement to strengthen corporate governance and to position Kenyan firms to be more competitive. 

“Good corporate governance practices make local businesses more competitive and resilient, and so support economic growth and stability,” said Oumar Seydi, IFC Director for East and South Africa. 

“IFC and CMA’s partnership will bring capital markets in Kenya closer to international best practices on corporate governance,” he said.   

The two organizations will work together to implement the Code of Corporate Governance Practices for Issuers of Securities to the Public, which was enacted in earlier this year. 

Under the one-year program, CMA and IFC will develop a toolkit that will enable actors in capital markets to apply and monitor the new corporate governance standards when they issue securities in Kenya. 

IFC and CMA also seek to develop a reporting framework for issuers of securities to track how well they are applying the Corporate Governance Code, and to help independent governance auditors provide assurance. 

“Through promoting sound corporate governance practices, Kenya’s capital market has the opportunity to accelerate development and attract increased domestic and foreign interest. The cooperation agreement we have signed today continues our efforts to position Kenya’s capital markets as a center of excellence and a gateway for regional and international capital flows” said CMA CEO Paul Muthaura. 

“CMA will work with IFC to ensure that the new Corporate Governance Code is implemented by issuers and that best practices support long-term success and sustainability of issuers,” he said. 

As part of the program, IFC and CMA will build a local network of corporate governance trainers and conduct sessions with boards and senior management of companies on how to adhere to the new Corporate Governance Code. 

CMA began implementing corporate governance reforms in 2012, which culminated in the new Code in 2016. 

IFC and CMA have also developed a Stewardship Code for Institutional Investors, which is pending approval. 

IFC has contributed to the adoption of 95 corporate governance codes, laws, and regulations in more than 30 countries worldwide. 

IFC’s Corporate Governance Program in East Africa is funded by the State Secretariat for Economic Affairs of Switzerland.