NAIROBI, KENYA, MAY 9, 2016 – KCB Group, Safaricom and Standard Chartered emerged top in the Cytonn Corporate Governance Index (“Cytonn CGI”) - the very first corporate governance report in Kenya. The top three firms ranked best in terms of best practices in corporate governance amongst the 50 listed companies at the Nairobi Securities Exchange that have a market capitalization exceeding Kshs 1 billion.
“Following the recent corporate governance related losses incurred in the listed markets of approximately Kshs 264 bn, we developed a useful index which the market may use to gauge levels of corporate governance in our listed firms,” said Elizabeth N. Nkukuu, CFA, Cytonn’s Chief Investment Officer, at the release of the report. “We hence themed the report "What is the role of corporate governance in the recent investor losses?” “Market participants, whether investors, companies or regulators, can rely on the index and analysis to factor corporate governance in their respective decisions. The report is in line with our goal of contributing to the deepening the capital markets through increasing transparency and availability of actionable data,” added Elizabeth.
The report, which shall be released once every year, ranks listed firms using 24 metrics. The metrics include disclosures, board composition and attendance, gender diversity, ethnic diversity, transparency and independence.
“Good corporate governance and sound professional ethics are essential to well-functioning markets, which in turn protect the interest of the investing public. As our markets expand, and firms become more exposed to the public, corporate governance is key to ensuring vibrancy, reducing investor losses and providing a platform for a firm and the economy to grow in a sustainable manner” said Maurice Oduor, Cytonn’s Head of Investments for Public Markets. “Corporate governance is founded on the pillars that businesses have to practice accountability to stakeholders, disclose information, have transparency in business activities and exhibit independence in decision making of the board,” added Maurice.
It is also notable that the companies with gender diversity and ethnic diversity delivered better returns to their investors compared to companies with limited or no diversity.
The report is available online: Cytonn Corporate Governance Report
| CYTONN CORPORATE GOVERNANCE INDEX COMPREHENSIVE RANKINGS |
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| No. |
Company |
Comprehensive Score(a) |
| 1 |
KCB Group |
95.8% |
| 2 |
Safaricom |
83.3% |
| 3 |
Standard Chartered |
83.3% |
| 4 |
Kengen |
79.2% |
| 5 |
Jubilee Holdings |
77.1% |
| 6 |
East Africa Breweries |
77.1% |
| 7 |
Barclays |
77.1% |
| 8 |
BAT Kenya |
77.1% |
| 9 |
DTB Bank |
75.0% |
| 10 |
I&M Bank |
72.9% |
| 11 |
Umeme Ltd |
72.9% |
| 12 |
Equity Group |
72.9% |
| 13 |
Pan Africa |
70.8% |
| 14 |
Co-operative bank |
70.8% |
| 15 |
NSE |
68.8% |
| 16 |
Kenya Power |
68.8% |
| 17 |
National Bank |
68.8% |
| 18 |
Kenya Airways |
66.7% |
| 19 |
Centum |
66.7% |
| 20 |
Liberty |
66.7% |
| 21 |
NIC |
66.7% |
| 22 |
Unga Group |
66.7% |
| 23 |
Bamburi |
66.7% |
| 24 |
Total Kenya Ltd |
65.2% |
| 25 |
ARM |
64.6% |
| 26 |
CIC |
64.6% |
| 27 |
EA Cables |
62.5% |
| 28 |
Standard Group |
60.4% |
| 29 |
Sasini |
60.4% |
| 30 |
Kakuzi |
60.4% |
| 31 |
Housing Finance |
60.4% |
| 32 |
TPS East Africa |
58.3% |
| 33 |
Nation Media Group |
58.3% |
| 34 |
Kenya Re |
58.3% |
| 35 |
CFC Stanbic |
56.3% |
| 36 |
Trans-Century Ltd |
56.3% |
| 37 |
B.O.C Kenya |
56.3% |
| 38 |
Britam |
54.2% |
| 39 |
Car and General |
54.2% |
| 40 |
Mumias Sugar |
52.1% |
| 41 |
Kenol/Kobil |
52.1% |
| 42 |
East Africa Portland Cement |
50.0% |
| 43 |
Williamson Tea |
47.9% |
| 44 |
Carbacid Investments |
45.8% |
| 45 |
WPP Scan Group |
45.8% |
| 46 |
Crown Paints |
43.8% |
| 47 |
Uchumi |
37.5% |
| 48 |
Flame Tree Group |
33.3% |
| 49 |
Limuru Tea |
18.8% |
| 50 |
Kenya Orchards |
10.4% |
| (a) The comprehensive score is based on the average weighting between the 24 corporate governance metrics. The higher the score indicated better corporate governance |
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