The 2010 Company of the Year Awards in Kenya sponsored by the Kenya Institute of Management failed to recognise investor relations in its award criteria. This is at a time when there is no firm legislative environment and the Companies Bill 2008 has yet to be promulgated because Kenya’s legislators are very busy.
Companies have set their own standards of shareholder communications. This is not good because none of them are doing a good job in the regulatory vacuum. Kenyan companies are missing out on an opportunity to shine.
The winners of the Kenyan Companies of the Year Awards are:-
The criteria for the COYA awards are everything except investor relations. That’s all you need to know.
As you are aware the standards of corporate governance have regressed in Kenya because of the obligation of shareholders to locate their shareholder proxy materials rather than have their company obligated to provide them. It all started when Safaricom sought exemption from sending out annual reports to its shareholders and the regulators did not put in place a quid pro quo. That started a trend. An unnecessary one.
Companies are able to determine their own standards of shareholder communications and this means that the majority shareholder (the one with the votes) determines what this should be. Director ignorance and apathy and an uninformed public and some sleepy regulators means that listed companies in Kenya have a unique opportunity to shine in this area of governance.
It’s an opportunity lost.
in the global standards, under leadership and governance results companies were rated on the level of stakeholders trust including investors to the level of giovernanace as well as level of transparency as standrds. these issues are captured in the OPI, COYA tool. I wish u are able to look at Reports and standards aplied for confirm ineguinty of the tool
Thank you IR
1-The OPI tool is made of 7 determinants as you quoted them correctly as Number 1 to 7 of your table
2-Please distinguish between Determinants and Awards
3-Determinants are the indivisible elements of the Management periodic Table; you remember the Periodic table you learned in High School! and remember an element [sodium, hydrogen etc--is indivisible]
4-The OPI team though many times—from a history of COYA that started with 7 Determinants in 2000 and almost ended with 20 Determinants in 2008. Why ? Because every year a sponsor comes with a suggestion to add this or that. Our OPI team may once in a while look at the prevailing market forces and decide a special award–however the tool remains with 7 Determinants.
5-In 2009/2010 OPI-KIM decided to be consistent with 7 Determinants[call them Ds]. However , the 7 Ds -let us assure readers -they cover all aspects of Businesses, NGOs, Governments and even Religious Based Organizations in case they want also to be competitive.
6-The Philosophy of OPI-is Africa to be competitive, Africa to be in Renaissance mode. Africa to use its resources well-human, natural and all other resources.
7-OPI stresses the key role of Leadership-which the longest of the 7Ds. Leadership has Brand Promise that talks of Vision and Brand.and Values. Governance that promotes rule of law and internal democracy and fact based decision making –including Investment. Strategy-that includes futulogy-science of building the future>>>hence Investment. There is Innovation–the key of investment ; it also reflect on participatory leadership.Risk management-touches on Business continuity, and making best decisions including investment decisions that will sustain the economy.
8-OPI encourages industry cooperation and intra and inter learning among the players
9-The other Ds are Human Resources, Customers and marketing, Information and Knowledge, Finance, Corporate Citizen ship and Environment and Productivity and Quality.
10-In these Ds you will find Investment heavily represented and captured from clients participating in OPI. They are required to provide evidence and trends of last 3 years.
11-The awards you have put in the table above are just awards-and the purpose of OPI is not to make people prepare for a trophy but to transform the culture of the Industry to think productivity, innovation, change, competition, world class and to equate any OPI organization with the urge to continually improve its performance to its customers and shareholders. A trophy is just a climax. Other companies have been OPI assessed but did not prefer an award-they just wanted to know where they are on the 1-10 OPI score and what they should do to upgrade theior OPI score from say 4.1 to about 6.2?
I kindly request the Editor to see Carol Karangi of KIM and get an audience so that IR gets a look at OPI tool and see how it addresses investment matters.
Thank you
COYA should assess whether:-
- shareholder proxy materials + annual reports are available online at the time of the announcement of the AGM
- whether the intent of the Companies Bill 2008 is being implemented
- whether the corporate website has “push technology” to inform registrants of news and shareholder proxy material being available online
- whether there is comprehensive information online to enable informed investment decisions by investors:-
– all regulatory announcements
– annual reports
– whether there is any evidence of engagement initiatives with investors
– what the company’s shareholder communications policy is
That should be fine as a start – its hitting the core investor relations principles in the context of a country that is sliding backwards from a corporate governance perspective. The parameters above are different from those that relate directly to existing shareholders e.g. having online interrogation of CDS accounts through registrars.
Kenya is in a state of transition and levels of ignorance are high and the COYA could be an excellent platform to recognise excellence in shareholder communications after all its good corporate governance.