Corporate Governance

Kakuzi PLC is a listed Kenyan agricultural company trading on both the Nairobi and London Stock Exchange engaging in the cultivation, processing and marketing of avocados, blueberries, macadamia, tea, livestock and commercial forestry.

The Board of Directors

The Board is composed of a balanced number of executive, non-executive and independent directors, who bring a range and diversity of skills, experience and technical knowledge. The Board recognises that opportunities exist to consider diversity upon future retirements of non-executive directors, as per the governance guidelines. The Board of Directors is responsible for putting in place governance structures and systems that support the practice of good governance in the company.

The Kakuzi Board consists of the Chairman, who has non-executive responsibilities, six other non-executive Directors and two executive Directors. The Board meets quarterly and is responsible for establishing the corporate governance pillars, setting the strategic direction, reviewing business performance and supervision of the management of Kakuzi operations. The Directors have the knowledge, experience, autonomy and skills enabling them to carry out their Board responsibilities.

The Principal responsibilities of the Board are:

• Strategy
• Acquisitions and disposals
• Financial reporting and control
• Internal controls
• Approval of expenditure above specified limits
• Approval of transactions and contracts above specified limits
• Responsibilities for corporate governance
• Board membership and committees
• Approval of changes to capital structure
• Debt financing

Board Committees 

The Board has established Committees to assist it in discharging its responsibilities and obligations. The Committees assist the Board in carrying out its functions and ensuring that there is independent oversight of internal controls and risk management. These Committees have terms of reference approved by the Board, indicating their mandate, authority, duties, composition and leadership. The appointment of the members to these Committees draws on the skills and experience of individual Directors.

Board Audit & Risk Committee

Chaired by Mr Daniel Ndonye, an independent Director, all members of the Audit and Risk Committee have the relevant qualifications and expertise in audit, financial management or accounting. The principal responsibilities of the Committee are:

• To review and monitor the financial statements of the company and the audit of those statements
• To monitor compliance with relevant financial reporting requirements and legislation
• To monitor the effectiveness and independence of the external auditor
• To review the efficacy of the company’s internal control system - the Committee regularly reviews the effectiveness of internal audit activities carried out by the company’s audit function and senior management
• To review significant accounting policies and practices
• To review non-audit services provided by the external auditors

Nomination and Remuneration Committee

Chaired by Mr Nicholas Nganga, a non-executive Director, the Nomination and Remuneration Committee seeks to provide remuneration packages that will attract, retain and motivate the right people for the roles and so far as is practicable, to align the interests of the executives with those of shareholders. The committee has the following principal responsibilities:

• Review the balance and composition (including gender and diversity) of the Board, ensuring that they remain appropriate
• Be responsible for overseeing the Board’s succession planning requirements including the identification and assessment of potential Board candidates and making recommendations to the Board for its approval
• Keep under review the leadership needs of, and succession planning for, the company in relation to both its executive and non-executive Directors and other senior executives
• Board performance evaluation and development of Directors

Independent Human Rights Advisory Committee (IHRAC)

This committee was established in 2020 and is chaired by former Attorney-General Githu Muigai. Kakuzi is one of the first corporate organisations in sub-Sahara Africa to constitute and establish such an independent advisory platform benchmarked against the United Nations Guiding Principles on Business and Human Rights.

The committee is responsible for providing independent advice to Kakuzi Board of Directors to ensure sustainable compliance with global human rights principles, including UNGPs and UN Declarations on Human Rights.

The IHRAC has been vital in giving oversight to the implementation of the Human Rights strategies, particularly in development and implementation of the company’s independent Operational Level Grievance Mechanism, called SIKIKA. In the reporting mechanism, the SIKIKA team presents to the IHRAC the challenges, progress, and outcomes faced in effectively and efficiently implementing their mandate. In response, IHRAC gives advise on how these can be met within the UN Guiding Principles. Being a panel of experts, the IHRAC has also been involved in validation of the Human Rights Policy, and design and implementation of the SIKIKA procedures and public reporting. Members of the IHRAC

• Prof Githu Muigai
• Grace Madoka
• Dr Brenda Achieng
• Andrew Ndegwa
• Gina Din Kariuki

Legal Risk Committee

The Legal risk Committee is a committee of the Board which serves as a link between the Board and management to:

• oversee the Company’s dispute resolution mechanisms and any resulting claims and legal proceedings; and
• ensure implementation of the Operational-Level Grievance Mechanism (OGM) decisions by the Board.

The Legal risk Committee is chaired by Mr Andrew N Njoroge, an independent Director. Its other member is Mr Stephen Waruhiu. The Committee shall develop its own procedures which shall be approved by the Board. During 2020, the Committee met once.

The Committee makes relevant recommendations to the Board for deliberation, adoption and implementation by management.

Our Principal Governance Policies

In partnership with our service providers, suppliers, UN Global Compact, and the Kenya National Commission on Human Rights, the following policies were implemented thus enhancing the realization of our core values and code of ethics:

• Code of Ethics- Signed by our employees and suppliers
• Anti-bribery Policy- Signed by our employees and suppliers.
• Anti-facilitation of tax evasion -19 senior managers trained
• Anti-modern Slavery policy- Signed by our employees and suppliers
• Membership to UN Global Compact
• Partnership with Kenya National Commission on Human Rights- 160 managers and supervisors sensitized and trained in human rights and business

The company has also put in place various policies that seek to enhance the effectiveness and adequacy of its governance and which are in compliance with the Kenyan legal framework and international conventions that Kenya has formally ratified and in line with good governance practices for the interest of stakeholders.