Kenya: Concern over Appointment of Directors of State Corporations

Following the recent appointment of 350 directors of various state corporations in Kenya by President Uhuru Kenyatta on 3 October, ARTICLE 19 has investigated whether or not the appointments and the State Corporations Act (CAP 446) meet the requirements of the Constitution of Kenya (2010).

The promulgation of the Constitution of Kenya in 2010 brought significant changes, especially on aspects of leadership, and transparency. For instance, Article 10 provides for national values and principles of governance and highlights that these include inter alia, good governance, integrity, public participation, transparency and accountability. Consequently, any recruitment, appointment or selection of state or public officers has to be in line with these values and principles.

The Constitution, under Article 73, further outlines the guiding principles of leadership and integrity to include  selection on the basis of personal integrity, competence, and suitability; or alternatively election in a free and fair process.

Evidently, the provisions are meant to safeguard against political patronage, a practice too common in previous regimes in Kenya. Unfortunately, the State Corporations Act (CAP 446), under which  the appointment of directors to state-owned corporations was based, fails to meet this requirement: it does not provide for any framework that would ensure that appointment of these directors is on the basis of personal integrity, competence, and suitability.

In fact, the failure of the Act to address the question of which criteria shall be applied clearly disqualifies the Act from meeting the constitutional requirement  of transparency or participation of the people as envisaged under Article 10 2 (c) of the constitution.

Moreover, when the State Corporations Act is analysed in the light of Article 232 of the Constitution, it becomes clear that this Act allows a potential breeding ground for corruption, nepotism and political patronage which Article 232 sought to address.

Under Article 232, the values and principles of public service have been identified, including fair competition and merit as the basis of appointments and promotions. Furthermore, the Constitution specifies, under Article 232(2), that the values and principles of public service apply to all state corporations, and goes further to require parliament to enact legislation to give full effect to the article. This has yet to be done.

Article 232 (1) g, h, and i provide that the values and principles of public service include fair competition and merit as the basis of appointment and promotions; representation of Kenya’s diverse communities; involvement of the people in policy making; and affording adequate and equal opportunities for appointment, training and advancement. This applies at all levels of the public service.

Section 6 of the State Corporations Act, on the other hand, only provides that appointments shall be by name and by notice in the Gazette, and shall be for a renewable period of five years, or for such shorter period as may be specified in the notice. In light of the above, it is clear that the State Corporations Act falls short of  constitutional requirements under Article 10, 73 and 232. As such, this is solid ground to contest the constitutionality of all these appointments.

In fact, in recommending the development of a consolidated code of governance for state corporations, the presidential taskforce on parastatal reforms identified:

  • the absence of a clear framework for recruitment, selection, appointment and inductions of boards of state corporations;
  • lack of uniformity in the application of appointment procedures; and
  • inadequate induction processes for Board members as challenges that needed to be resolved.

It is also important to note that the State Corporation Act does not have any provision that gives effect to Article 27 of the Constitution which calls for equality and freedom from discrimination.

Declaring the supremacy of the Constitution Article 2(4) categorically provides that any inconsistency with the Constitution is void to the extent of its inconsistency, and that any act or omission in contravention of the constitution is invalid.

However, in March 2015 the President, through an executive order, directed all boards of State Corporations (SCs) to implement forthwith the provisions of MWONGOZO,  is a code of governance for state corporations. Amongst the requirements of this guide were that:

  • Board appointments shall be made in line with Article 27 of the Constitution of Kenya.
  • The Board should be appointed through a transparent and formal process governed by the overriding principle of merit.
  • Board appointments should take into consideration the mix of skills and competencies required for the achievement of the organization’s long-term goals.
  • The chairpersons of all SCs shall be appointed by the President and shall at a minimum possess the qualifications, skills and experience.
  • The Board members of SCs shall be appointed by the Cabinet Secretary of the parent ministry and shall at a minimum possess the qualifications, skills and experience.
  • The appointing authority shall ensure that any person appointed to the Board of a SC satisfies the fit and proper requirements.

The State Corporations Act and the recent appointments by the President fall short of constitutional requirements regarding appointment of directors and board members of state corporations.

ARTICLE 19 therefore calls upon the National Assembly to urgently create legislation to ensure that the State Corporations Act, and future appointments, are in line with the Constitution on matters of transparency, competitiveness, gender and special interest groups, diversity, and public participation.