16 Top Kenyan Brands That Failed And Created Untold Misery After Mishaps In Corporate Governance

By Steve Biko Wafula / Published March 14, 2023 | 7:11 pm

KEY POINTS

Corporate governance refers to the set of systems, principles, and processes by which a company is directed and controlled.

It encompasses the mechanisms through which a company’s objectives are set and the means of attaining those objectives and monitoring performance.

KEY TAKEAWAYS

Effective corporate governance helps to build investor confidence, attract foreign investment, and mitigate risks associated with fraud, corruption, and other forms of misconduct.

Additionally, corporate governance can help companies to manage their resources more efficiently, improve their performance, and enhance their reputation.

Corporate refers to anything related to a company or a business organization. It includes the legal and regulatory framework within which businesses operate, as well as the internal processes and structures that govern how a company is managed and controlled.

Corporate governance refers to the set of systems, principles, and processes by which a company is directed and controlled. It encompasses the mechanisms through which a company’s objectives are set and the means of attaining those objectives and monitoring performance.

Corporate governance also involves balancing the interests of a company’s many stakeholders, such as shareholders, management, customers, suppliers, financiers, government, and the community.

In Kenya, corporate governance is a big concern for businesses because it plays a critical role in ensuring that companies operate with transparency, accountability, and integrity. This is particularly important in the context of Kenya’s rapidly growing economy, which has seen a rise in the number of large companies and multinational corporations operating in the country.

Effective corporate governance helps to build investor confidence, attract foreign investment, and mitigate risks associated with fraud, corruption, and other forms of misconduct. Additionally, corporate governance can help companies to manage their resources more efficiently, improve their performance, and enhance their reputation.

16 brands that failed and created serious misery are;

Nakumatt Holdings: At one point, Nakumatt was the largest supermarket chain in East Africa but it collapsed in 2017 due to poor management and financial mismanagement.
Uchumi Supermarkets: Uchumi, another major supermarket chain in Kenya, has faced financial difficulties and governance issues leading to its decline and bankruptcy in 2018.
Chase Bank: Chase Bank, one of the leading commercial banks in Kenya, was placed under receivership in 2016 due to poor governance and financial mismanagement.
Imperial Bank: Imperial Bank was also placed under receivership in 2015 due to fraud and poor governance.
Mumias Sugar Company: Mumias Sugar Company, the largest sugar manufacturer in Kenya, has been struggling financially and facing governance issues leading to its collapse in 2020.
Karuturi Global Ltd: Karuturi Global, a leading floriculture and agribusiness company, has been facing governance and financial difficulties leading to its collapse in 2020.
Eveready East Africa: Eveready East Africa, a leading battery manufacturer, has been facing governance and financial difficulties leading to its decline and closure in 2021.
CMC Motors Group: CMC Motors Group, a leading car dealership in Kenya, faced financial difficulties and governance issues leading to its decline and restructuring in 2021.
East African Portland Cement Company: East African Portland Cement Company, one of the leading cement manufacturers in Kenya, has been facing governance and financial difficulties leading to its decline in recent years.
Pan African Insurance Holdings: Pan African Insurance Holdings, a leading insurance company in Kenya, has faced governance and financial difficulties leading to its decline and acquisition by Sanlam.
National Oil Corporation of Kenya: National Oil Corporation of Kenya has faced governance and financial difficulties leading to its losses and decline in recent years.
Kenya Pipeline Company: Kenya Pipeline Company has been facing governance and financial difficulties leading to its losses and decline in recent years.
Sameer Africa: Sameer Africa, a leading tire manufacturer in Kenya, faced financial difficulties and governance issues leading to its decline and acquisition by Apollo Tyres.
Tuskys Supermarkets: Tuskys, a major supermarket chain in Kenya, faced governance and financial difficulties leading to its decline and restructuring in 2020.
ARM Cement: ARM Cement, a leading cement manufacturer in Kenya, faced financial difficulties and governance issues leading to its decline and acquisition by National Cement.
Bamburi Cement: Bamburi Cement, one of the leading cement manufacturers in Kenya, has been facing governance and financial difficulties leading to its decline in recent years.

Lessons Herein;

There are several lessons to be learned from businesses that failed due to corporate governance failures from a Kenyan perspective. Here are some key lessons:

Compliance with legal and regulatory frameworks is crucial: Companies need to ensure that they comply with all relevant legal and regulatory requirements, including corporate governance codes and guidelines. Failure to comply with these requirements can result in severe consequences, including legal sanctions and reputational damage.
Accountability and transparency are essential: Companies must ensure that their decision-making processes are transparent and accountable, with clear lines of responsibility and reporting. This helps to prevent conflicts of interest and ensures that decisions are made in the best interests of the company and its stakeholders.
Effective risk management is critical: Companies must identify and manage risks effectively, including financial, operational, and reputational risks. This involves implementing robust risk management systems and processes, as well as ensuring that there is effective oversight of risk management activities by the board of directors.
Board composition and effectiveness matter: The board of directors plays a crucial role in corporate governance, and it is essential to have a diverse and effective board. This includes having directors with relevant expertise, experience, and independence, as well as ensuring that the board is capable of providing effective oversight and guidance to management.
Corporate culture is key: Companies need to develop a strong corporate culture that emphasizes ethical behavior, integrity, and accountability. This can be achieved through effective communication, training, and incentives that align with the company’s values and objectives.

In summary, learning from the failures of businesses due to corporate governance failures can help companies in Kenya to build better governance systems and processes, improve their performance, and enhance their reputation.

About Steve Biko Wafula

Steve Biko is the CEO OF Soko Directory and the founder of Hidalgo Group of Companies. Steve is currently developing his career in law, finance, entrepreneurship and digital consultancy; and has been implementing consultancy assignments for client organizations comprising of trainings besides capacity building in entrepreneurial matters.He can be reached on: +254 20 510 1124 or Email: info@sokodirectory.com

View other posts by Steve Biko Wafula

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16 Top Kenyan Brands That Failed And Created Untold Misery After Mishaps In Corporate Governance

KEY POINTS

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