22 - Encouraging Sustainable Investment in South Africa

Summary

In 2017 the Kenya Capital Markets Authority (CMA) issued a stewardship code for institutional investors. The code was informed by the need to respond to the changing business environment coupled with the desire to align Kenyan local standards to global best practice focused on promoting institutional strengthening for listed companies. The United Kingdom (UK) Stewardship Code 2010 heavily influences the code. This chapter seeks to analyse the theoretical and contextual issues relating to the stewardship of code in Kenya through functional and practical lenses and what it portends in the governance of publicly listed companies. The study finds that two years after promulgation of the code, none of the licensed fund managers or other institutional investors or asset owners have signed the Code. Not much of institutional investor engagement in management of companies has been reported. The results of the study seem to suggest that amongst the reasons for lack of uptake of the code are that it was issued without any stakeholder participation and sensitisation. As a mechanism for enhancing the awareness on the code, the CMA is planning to launch the code officially within this financial year.