A Critique of Corporate Governance Practices at the National Crime Research Centre in Kenya

Abstract

Effective corporate governance enhances agency performance, offering several advantages such as the protection of shareholder interests, better resource management to attract investment and capital, and promotion of sustainability. The Presidential Taskforce on Parastatals Reforms examined state corporations’ performance in Kenya and identified a complex governance framework that involved interactions among key stakeholders such as the legislature, ministers (now cabinet secretaries), boards, and chief executive officers (CEOs). The report highlighted key challenges such as losses of resources due to governance failures, a convoluted framework of laws and institutions that cause an overlap in accountability, and ineffectual board and CEO leadership, with many boards failing to set strategic directions. As one of the state corporations, the National Crime Research Centre (NCRC) faces various corporate governance challenges and shortcomings. These include an extensive Governing Council, executive-heavy composition without independent members, ambiguous procedures for council member appointments, and the dual role of the CEO as both the council secretary, a deviation from standard governance practices. Additionally, there is a conflict between the law and the executive order regarding the Centre’s ministerial oversight. The study applied doctrinal methodology to evaluate the best corporate governance practices for state-owned entities and came up with the following recommendations: The Centre should review its enabling legislation by capping its council membership between seven to nine members; by providing for a non-executive chairperson as well as make provisions to ensure that a third of the Council members are independent members; by providing for the CEO as a council members without the rights to vote; by delinking the functions of the CEO with the secretary of the Council and establishing the latter position; by developing clear guidelines on the

appointment criteria and process of appointing Council members and lastly by giving a timeless and dynamic definition to the cabinet secretary responsible for the Centre as the cabinet secretary responsible for crime research matters