KENYA Law and Practice Contributed by: Sammy Ndolo, Brian Muchiri, Damaris Muia and Nicole Gacheche, Kieti Law LLP
oversight and guidance. Most of the directors should be non-executive directors, and one- third of the board should be independent non- executive directors. Board Size The optimal size of the board should be deter - mined based on the company’s specific needs and operations. It should be large enough to accommodate a diversity of expertise and per - spectives yet remain conducive to productive discussions during board meetings. Director Limits An individual director of a listed company (excluding corporate directors) cannot hold such a position in more than three publicly listed com - panies concurrently. In addition, certain industries, such as banking and insurance, may have additional board com - position requirements based on “fit-and-proper” assessments conducted by the relevant regula - tory bodies on the directors. 4.4 Appointment and Removal of Directors/Officers Appointment of Directors The Companies Act allows for appointing direc - tors upon a company’s incorporation. This pro - cess is set out in the articles of association for future appointments. As such, directors are typi - cally appointed by a resolution of the sharehold - ers, with a simple majority vote sufficing. How - ever, the articles of association may prescribe specific instances where the directors may appoint a director (eg, filing a casual vacancy.) Restrictions on appointment of directors The Companies Act limits who can be appoint - ed as a director. Firstly, any individual under the age of eighteen is automatically ineligible. Fur -
thermore, the company’s articles of association will ordinarily preclude specific groups of peo - ple from acting as directors. Such groups may include undischarged bankrupts and individu - als deemed to be of unsound mind. This aligns with the Insolvency Act, which further prohibits undischarged bankrupts from participating in the management or control of any business without the express consent of a bankruptcy trustee or the court. Removal of Directors Ordinary resolutions can remove a director. How - ever, specific procedures must be followed. The director in question must receive a special notice detailing the proposed removal. The director is then given the opportunity to submit written rep - resentations within twenty-one days of receiving the notice. Following the receipt of any representations, the board must convene a meeting to consider the matter. The director facing removal is entitled to be heard during this meeting when the motion for removal is being considered. If the motion for removal is passed, the director retains the right to challenge the removal in court. It is important to note that even after being removed from office, a director remains sub - ject to certain continuing duties. These duties include: • the obligation to avoid conflicts of interest regarding exploiting any property, information, or opportunity that the individual became aware of while acting as a director; and • the prohibition on accepting benefits from third parties concerning actions taken or omitted during their tenure as a director.
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