[Kenya] Stewardship code for institutional investors at the Nairobi Securities Exchange gazetted
The Capital Markets Authority (CMA) has announced the gazettement of the Stewardship Code for Institutional Investors (Stewardship Code). This framework is only the second of its kind in Africa after South Africa.
The Stewardship Code’s primary intent is to empower Institutional investors to take up the role of stewardship as the representatives of their clients or investors to encourage continuous improvement in corporate governance practices in listed companies and other approved products.
The Stewardship Code is applicable to institutional investors – asset owners and asset managers – investing in securities listed at the Nairobi Securities Exchange.
The development of the Stewardship Code is the final component of the corporate governance reforms instituted by the CMA in 2012 that have included the enactment of a new Code of Corporate Governance Practices for Public Issuers of Securities and the development of a standardised Reporting Template for Issuers to publicly report on their application of the Code.
“The enactment of the Stewardship Code is a strong statement of the Government’s support for ongoing corporate governance reforms in the capital markets. Its design, development and drafting were spearheaded by the Authority through a special industry committee appointed by the CMA Board”, said CMA Chief Executive, Mr. Paul Muthaura.
He added that The World Bank Group and International Finance Corporation were key partners, having provided technical and financial assistance for all components of the governance reform agenda.
The Stewardship Code will complement the existing reporting and assessment templates for enforcement and oversight of sound governance practices under the Corporate Governance Code through using the information reported to inform their investment and voting decisions as well as to proactively engage management and the boards of investee entities.