Instilling good corporate governance is Safaricom’s bane

In Kenya’s business circles, Safaricom is untouchable to some. The perception is that the CEO Bob Collymore has the blessings of the President and every other crucial leader you need to succeed. But this is not always a good thing, when true. Every of your step is followed and analysed. Even when in your private life, every move you make becomes a public debate.

Some things have worked right for Bob. He took over an already successful company and his challenge was to sustain the growth. The opportunity here is always what ingenious ways you will need to employ to keep growth margins desirable but at the same time ensure they are sustainable.

He also took over from a company that had permeated every facet of Kenya’s fabric. Every Kenyan knows about Safaricom and have interacted with it. They could have seen their advertisements, used their telecommunications infrastructure or know someone who works there.

But while at this, ensuring that your backyard is beyond reproach sometimes becomes a bane. Almost every leader in Kenya, from political to religious to business will talk about the need to inspire international confidence to merit more tourists, defeat terrorism and boost the economy. It is an outward outlook, to what the inward will benefit. Narratives about the inward showing the outward that is doable are mostly muted.

Such an inward that gets tongues wagging is M-Pesa. Safaricom’s most successful product is used in reference to mobile banking and its contribution to financial inclusion at almost every academic institution in the world. This is certainly not the success of the company alone. It is a product of belief in many people including industry regulators like the Central Bank of Kenya.

As successful as it has been, so has it attracted every entrepreneur in the country. Safaricom is the company that if you win a tender, you are sure of success both within the organization and outside. One of the outstanding reasons why everyone wants to trade with Safaricom is because they pay their obligations on time. Any entrepreneur needs this to boost their liquidity and empower them, against a rather tough economic environment.

At a Parliamentary hearing on whether Safaricom should be declared dominant in the Kenyan market, Bob Collymore took a global position. He was unequivocal that the debate fails to appreciate a Kenyan born and bred success story being pivoted to global success, bench marked against multinationals like Google. The legislators saw the sense in the reasoning.

Corruption

Corruption is a reality, remarked Bob in an interview a month ago. He was shocked that the National Assembly had been petitioned, by use of a draft internal report by audit firm KPMG to investigate its internal affairs. Unfortunately with a draft document, something the company has rightly alluded it, it cannot stand the test of time and process.

Anyone involved in processes will tell you once you receive a draft document, you look at it and provide answers to the grey areas before being finalized. Only when you fail to explain the grey areas will the final report maintain the questions and the ball shifts to whether the issues raised will be addressed. As it stands, all conversations in the public are based on the draft report and nothing about the final report which was not leaked.

A core question that begs answers is whether the company has admitted corruption in it and whether they have done something and are doing something towards it. The answer is fortunately already given in multiple ways.

First, it has been continuously making public the number of employees it sacks due to fraud. For instance, the internal report dubbed 2015 Sustainability Report affirmed that over the 12 months to March last year, Safaricom sacked 58 employees who were involved in corrupt dealings.

Secondly, the CEO has been categorical that he did not commission the report to gather dust. You can be sure that I did not commission this report to sit on my shelves. I will act on the recommendations therein once I read the final report which I do have, he authored.

Thirdly, he has led the way in making public his salary and wealth. Raising the transparency bar, he revealed that he earns an average salary of sh9 million per month and has net assets of $2.7 million (about Sh277.3 million). The only other individual to do this is Joshua Oigara, the CEO of KCB.

Fourthly, in his numerous pronouncements, he has shown leadership in abiding by integrity principles. Bob penned his signature in signing the Business Code of Conduct instituted by Kenya Private Sector Alliance (KEPSA). The code is expected to enhance the fight against corruption and bribery.

Fifthly, Safaricom have also been supportive of the Bribery Act 2016 that was signed by the President in March this year.

Sixth, Safaricom has signed the The UN Global Compact Board. It is the world’s largest corporate citizenship initiative that encourages businesses globally to adopt sustainable and socially responsible policies. In May last year, UN Secretary General Ban Ki Moon renewed Bob Collymore’s term as a board member of the United Nations Global Compact (UNGC) for another three years.

Among many other good corporate governance initiatives the company has done, they are becoming their reason for latest controversy as those affected, either by not winning tenders or cancellation of tenders, among others are fighting back.