Last week, I took hours of time out of my valuable working day to dissect the veritably Sisyphean piece of legislation titled the Certified Managers Bill. You would have to look up my piece last Monday to understand what unbridled legal drafting excitement can attempt to unfurl on Kenya’s working class. So it was with even more utter confoundedness that I poured through the Institute of Directors Bill, 2019. Let’s start with I had never heard of the bill until I read an opinion piece in this paper on June 21st 2021, titled “Why it is critical to regulate how board directors are picked, work.” The article was authored by Duncan Watta, a former chairman of the Institute of Directors, who argued that “Businesses and government institutions will need increasingly stronger corporate governance policies, practices and structures that will inspire the confidence of both local and international investors. One way of achieving this is by having an elaborate system of selecting directors. At present, appointment of directors is left to the whims of appointing authorities, making this important decision arbitrary, random and subject to possible abuse where there is no oversight or accountability.” He goes on to further provide that the Institute of Directors Bill, 2019 will attempt to wash away dodgy director issues in Kenya’s public and private sector.

I poured over the proposed legislative magic bullet with a fine tooth comb to see what was being suggested. To begin with, the bill establishes the Institute of Directors of Kenya to provide for the registration and regulation of their conduct and to issue certificates of registration to its members annually as a form of quality assurance to the public bodies, entities, enterprises and companies on whose boards its members are appointed. It is important to note that an Institute of Directors (IOD) already exists in Kenya having been established in 2004 as an initiative of the Centre for Corporate Governance. According to its website, it was established as a membership organization of practicing and aspiring directors drawn from both the private and public sectors of Kenya’s economy. Through this bill, the same institute is now trying to embed itself as a statutory body that will license and regulate directors.

The bill proposes that directors be required to be members of the Institute by applying for the same and being issued with a certificate of competence that is borne of various trainings and hoops that a potential director must jump through before being certified as licensed to direct. Once so certified, a director may be subject to deregistration and disciplinary procedures if found to have undertaken professional misconduct. The throbbing heart of the bill is tucked away into a tiny little section 25 which states that “A person who is duly registered as a member of the Institute under this Act may be appointed to the Boards of public entities, organs, enterprises and corporations.”

So Mr. Watta’s opinion piece generated quite a bit of confusion for me. On the first part he argues that the issue of poor director selection and appointment is one that cuts across both the public and private sector and there needs to be a body to provide oversight as it is currently undertaken in a whimsical manner that is “arbitrary, random and subject to possible abuse”. He then continues to argue that there needs to be in place a law that provides for how directors of public and private sector institutions that have been involved in massive corruption scandals should be held to account, which solution just like Omo with power foam, he posits can be found in this proposed legislation.

However what the bill proposes is how to convert a private institution into a statutory body that will now be responsible for appointments into government related entities as only its paying and licensed members will be eligible for such appointments. So for anyone wanting to be appointed to a parastatal, they will have to seek registration as a member and keep that registration current as there will be an annual renewal process. Given the fact that directorships are not permanent positions where a director earns their daily bread, it will be interesting to see how an individual will seek to maintain membership in good standing for a director position that may or may not emerge in the fullness of time. Furthermore, as any good recruiter will tell you, talent often never looks for work and is typically head hunted. As the government seeks to shift the composition on quite a number of its critical boards today, trying to tie its hands by straitjacketing the director selection process will be a gargantuan task. I wish the IOD the very best in this endeavour.

[email protected]
Twitter: @carolmusyoka