NSE boss urges firms to put up measures to fight graft

The Nairobi Securities Exchange board on Monday said all listed companies must publicly declare anti-graft programmes taken within and throughout their value chains.

Board Chairman Eddy Njoroge said all companies trading on the bourse must report detailed measures taken to discourage corruption within their business as a way of enhancing social corporate governance, and mitigating climate change in their annual reports to shareholders.

“We must communicate openly about our financial, social and environmental practices that global institutional investors use to evaluate individual company performance. This will help you build trust and confidence in your companies bringing in higher returns,” he said.

Mr Njoroge spoke when NSE Chief Executive Geoffrey Odundo signed the Code of Ethics for Business in Kenya at the exchange offices in Westlands, Nairobi; witnessed by UN Global Compact representative Ms Phyllis Wakiaga who is also the Kenya Association of Manufacturers chief executive.

Mr Odundo said investor confidence was adversely affected by graft, which undermined governance, democracy and the rule of law.

“The cost of doing business has risen, investors driven away thereby reducing employment opportunities much to the detriment of our economy. We will cultivate a culture of governance and transparency among all listed companies while safeguarding interests of all investors,” he said.

Ms Wakiaga called on regulators to initiate incentives for companies that abide by the code saying no longer should Kenya glorify graft in any form saying this had set a bad example for the young generation.

“500 private companies affiliated to KAM and the Kenya Private Sector Alliance (Kepsa) have committed themselves to doing clean business that abhors graft, and it is upon all listed companies to follow suit and declare that no deals will be sealed with shady companies that condone unethical practices in their businesses,” she said.

WOMEN PARTICIPATION
The UN Global Compact is a strategic policy initiative that requires businesses to observe 10 universally accepted principles in the areas of human rights, labour, environment and anti-corruption.

Mr Njoroge said NSE is a member of the global Sustainable Stock Exchanges initiative that seeks to promote corporate transparency and high performance on environmental, social and corporate governance fronts.

NSE, is also a signatory of the UN Women initiative that requires all listed companies to increase their participation in boardrooms, top management and within their hierarchy.

It said studies had shown that higher involvement of women helped companies enhance their competitiveness in the market place thereby enabling them post higher results.

To ensure compliance with the new code, Mr Njoroge said NSE would work closely with the Capital Markets Authority in formulating policies that coerce companies to abide or risk punitive measures.