Saturday, December 6, 2008



By XN Iraki

Three issues worry me in the privacy of my thoughts. One is the high number of directors who are ‘cross listed’, serving in several boards of directors. Two is the fact that half the Cabinet served in the Kanu Government. Three is that our mindset is to some extent still frozen in time, a residue of a bygone era, whose grandeur and time long passed.

While the Government and politicians are our scapegoats, taking flak for our problems, we need to dig deeper. They may be victims of our unkind systems and mindsets.

Our politicians have quickly got their own scapegoats — the latest being the Electoral Commission of Kenya (ECK). Does anyone believe ECK was the cause of the post-poll chaos and needs disbandment? The next may be the media. First, what is the thinking behind ‘cross listing’ of directors?

Some observers suggest it is all about ownership; there is still a very high concentration of wealth in a few hands. The owners must safeguard their interests by using familiar ‘eyes’. The eyes may be themselves, their friends, relatives, former classmates, golfing buddies or those who have excelled in their field that anyone would covet their presence in the board for PR purposes.

A second line of thought is that this cross listing is nothing but an alliance, a network or a keiretsu, to talk Japanese. Firms are customers to each other, and what better way to ensure there is symbiotic relationship than to have directors cross-listed?

Others argue almost to the point of conviction that there are too few good people who understand the complexity of corporations — private and quasi-public ones. They cite the high salaries they are willing to pay the managers as the best evidence. If we follow this argument, we could boldly conclude the world is run by just a few people.

The second issue is too many ‘familiar’ faces in the Cabinet. How could we fight for change and even kill each other just to return the same faces to Parliament? What I find interesting and ingenious is the way Kanu returned to power last year. Kanu, in fact, strategically divided itself with some members going to ODM and others to PNU; whichever party won, Kanu won.

The focus

What do the two issues have in common? Would less cross-listed directors do a better job? Would letting directors focus on one firm lead to better performance?

My hunch tells me yes, because the pace and complexity of change nowadays demand focus. Experience may not always be an asset today; perhaps the reason the average age of directors is going down.

Could cross-listing be the reason few of our firms are multinational? In addition, our Schools of Business curricula have focused less on directors; contrary to political scientists who focus mainly on political board of directors — the MPs and the presidency.

Would Kenya be more developed if there were less recycling of political faces? Certainly yes. History is a witness. The change over from colonial era ushered in a period of unprecedented economic growth. When our post independent political leaders resisted renewal, we started moving backwards. The first 10 years of Kanu regime were golden. Mlolongo voting was a betrayal to the coveted renewal. We backslid till the repeal of Section 2(a) of the Constitution that ushered in multi-partism.

The first five years of Kibaki regime were golden with unprecedented economic growth. His return dented our optimism and betrayed renewal. I fear 2012 may be another betrayal to renewal.

Growth in corporate and public sectors is driven by renewal, the same way a snake sheds its skin after outgrowing the old one. Renewal is about new people, new ideas, new innovations and perspectives. Elections every five years or three years in corporate boards ought to imbibe the systems with new and bolder ideas.

Finally and biologically speaking, where would we be without renewals, through births and deaths?