KENYA Law and Practice Contributed by: Sammy Ndolo, Brian Muchiri, Damaris Muia and Nicole Gacheche, Kieti Law LLP
3.3 Decision-Making Processes The board of directors and the shareholders make the decisions through the following pro - cesses: Directors The board makes decisions through formal reso - lutions, typically reached during board meetings. The company’s articles of association outline the specific procedures, quorum requirements (the number of members needed to be present), meeting notice periods, and voting require - ments for passing resolutions. Generally, a sim - ple majority vote suffices. Written resolutions can also be used to make decisions without a physical meeting. Shareholders Shareholders make decisions through share - holder resolutions. These resolutions can be passed either by a vote at a formal sharehold - ers’ meeting or as a written resolution without a meeting. Some exceptions exist, such as the early removal of a director or auditor, which requires a meeting and cannot be done through a written resolution. The type of resolution need - ed, ordinary (simple majority) or special (75% majority), depends on the specific decision and is dictated by both the Companies Act and the company’s articles of association.
Public companies, in contrast, must have at least two directors, at least one of whom must be a natural person. Based on their governing documents, public (and private) companies can set a higher minimum or maximum number of directors. Leadership In most cases, the board elects a chairperson from its members to lead and manage board meetings unless the company’s articles of asso - ciation or a shareholders agreement specify oth - erwise. 4.2 Roles of Board Members The Companies Act provides for a single-tiered board of directors with no distinctions unless a company elects to differentiate certain manage - rial roles for certain board members. In some cases, the chairperson may be given a casting vote in the event of a deadlock in a decision of the directors. The board of directors is in charge of managing the company’s business. 4.3 Board Composition Requirements/ Recommendations The Companies Act does not prescribe the com - position of the board of directors for private or unlisted public companies. These entities are free to appoint directors as deemed necessary to fulfil their specific requirements. However, companies listed on the NSE must ensure their board composition complies with the recommendations outlined in the CMA Gov - ernance Code. Balance of Directors The board should be comprised of a balanced mix of executive directors responsible for the company’s day-to-day operations and non- executive directors who provide independent
4. Directors and Officers 4.1 Board Structure Number of Directors
Private companies must have at least one natu - ral director, although their governing documents may establish a higher minimum or maximum number.
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