Atwoli on the spot over National Bank board meetings
What you need to know:
- In 2012, Mr Atwoli attended 11 of the total 33 board meetings or 33 per cent while in the previous year, he showed up for eight out of 23 total sittings which is equivalent to 35 per cent.
- Mr Atwoli, who risks losing his position on the board as per CBK rules, said his tight schedule as secretary-general of umbrella workers body the Central Organisation of Trade Unions (Cotu) made it difficult for him to attend the meetings.
- CBK prudential guidelines require banks to have procedures of forcing out directors who do not attend a least 75 per cent of board meetings.
Cotu secretary-general Francis Atwoli’s attendance of board meetings at National Bank, where he is a director, fell short of the minimum threshold stipulated by the Central Bank, the lender’s annual report has shown.
Central Bank of Kenya (CBK) prudential guidelines require bank directors to attend at least 75 per cent of board meetings, but Mr Atwoli attended 70 per cent of the 12 scheduled sittings in 2013.
Mr Atwoli represents workers’ interests in the bank, having been appointed to occupy one of the National Social Security Fund (NSSF’s) two positions on the board.
“Out of the 12 scheduled meetings in the year 2013, director Atwoli attended 70 per cent thereof,” states NBK’s annual report released at its Friday annual general meeting.
In 2012, Mr Atwoli attended 11 of the total 33 board meetings or 33 per cent while in the previous year, he showed up for eight out of 23 total sittings which is equivalent to 35 per cent.
NSSF is the biggest shareholder of the Nairobi Securities Exchange-listed National Bank with a 48 per cent stake, while the Treasury holds 22 per cent with the other free-float being held by the public.
Mr Atwoli, who risks losing his position on the board as per CBK rules, said his tight schedule as secretary-general of umbrella workers body the Central Organisation of Trade Unions (Cotu) made it difficult for him to attend the meetings.
The CBK prudential guidelines require banks to have procedures of forcing out directors who do not attend a least 75 per cent of board meetings.
Former NSSF managing trustee Alex Kazongo in 2011 lost his board seat in Bamburi Cement after he failed to attend five consecutive meetings.
“Every director has a duty to attend board meetings regularly and to effectively participate in the conduct of the business of the board, an institution should have a policy that requires a member to resign if he fails to attend board meetings regularly,” states CBK’s prudential. NBK has seven board members.
All other directors are recorded as having attended all scheduled and special sittings last year.
“Whenever I fail to attend board meetings, I am somewhere representing workers who are shareholders of the bank,” said Mr Atwoli in a telephone interview from Geneva, Switzerland where he is attending the International Labour Organisation AGM.
“I represent workers both locally and internationally,” he added.
National Bank is currently undergoing a major capital restructuring, which could see the NSSF and the Treasury get billions of shillings for redemption of their preference shares.
A decision to sell a portion of the lender to strategic investors has also been pending for years, in addition to an impending rights issue.
All these are board level decisions that have a direct impact on future performance of the bank, which is only now getting its footing having nearly collapsed on the weight of bad debts.
The labour movement leader also failed to attend four ad hoc meetings (with apologies), meaning that out of a total 16 meetings that the National Bank board held in 2013, he attended seven (44 per cent) of them.
Mr Atwoli was not present at the bank’s AGM where shareholders allowed its management to use part of the Sh10 billion it expects to raise from a rights issue to redeem Sh5.7 billion in preference shares owed to the Treasury and NSSF.
He joined the bank’s board in April 2003. CBK requires that directors be provided with a schedule of all meetings at the beginning of every financial year to allow them plan their personal calendars around the directorship duties. National Bank CEO Munir Ahmed said Mr Atwoli’s board position can only be decided by shareholders.
