Compliance with capital markets authority corporate governance guidelines: a survey of companies listed at the Nairobi Stock Exchange

Abstract

In the past one and a half decades there has been a clamour for good corporate governance from investors regulatory authorities and the government aimed at ensuring proper exercise of the corporate power and safeguard shareholders interest. The clamour has further been fuelled by high profile corporate failures in the recent past. This clamour has brought about various codes and guidelines all aimed at ensuring proper corporate governance. In Kenya the Capital Markets Authority (CMA) together with other organisations have been at the forefront of ensuring good governance especially for companies quoted at the Nairobi Stock Exchange. It is in line with this that CMA in the year 2002, developed guidelines on corporate governance for companies quoted at the Nairobi Stock Exchange. The study seeks to determine whether companies quoted at the Nairobi Stock Exchange comply with the Capital Markets Authority guidelines on corporate governance issued in the year 2002. The data for the study was collected through the use of a self-administered questionnaire and from annual reports and accounts of the companies and publications from the Nairobi Stock Exchange. The data was analysed and presented using descriptive statistics and content analysis. The findings of the survey are that the Capital Markets Authority corporate governance guidelines already attain a high degree of acceptance. There is no company that totally rejects the guidelines. There was however found to be a low level of compliance with regard to disclosures and there is therefore need to encourage or enforce more disclosures.