A Study of Coporate Governance Among Saccos
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND
Governance is the process by which a board of directors, through management, guides an institution in fulfilling its corporate mission and protects the intuitions assets over time. (principles and practices of microfinance governance, by Rachel Rock Maria Otero Sonia Saltzman). However, the success of and strength of a financial cooperative in some parts of the world shows that governance issues can be transcendence when basic principles are followed. Therefore is corporate governance the cause of all troubles in Saccos?
Governance is a system designed to control and distribute power within an organization for economic, corporation and development (OCED). Corporate governance involves a set of relationships between a company management, its board, shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company and means of attaining those objectives and monitoring performance are determined.
Saccos were first introduced in Kenya in 1964. In 1969 the government made a radical relationship which has been the rapid growth of Saccos in Kenya. Today there are estimated 2600 active Sacco’s societies in Kenya which together have been able to mobilize Kenya shillings. In Kenya the ministry of cooperative development and marketing oversees Saccos activities but this moves to the Saccos Regulatory Authority (SRA) established by the new law. Currently Saccos are newly monitored. There is no annual or frequent examination of Saccos by the regulatory body. Moreover there is no comprehensive set of standards by which Saccos should comply. It is hoped that the new Sacco regulation will establish prudential standards to govern.
The standards will establish benchmarks and also enforce safe and sound principles to safe guard Saccos from losses. As financial institutions Saccos should be accountable to their members and to the public by enhancing excellence through
INTRODUCTION
1.1 BACKGROUND
Governance is the process by which a board of directors, through management, guides an institution in fulfilling its corporate mission and protects the intuitions assets over time. (principles and practices of microfinance governance, by Rachel Rock Maria Otero Sonia Saltzman). However, the success of and strength of a financial cooperative in some parts of the world shows that governance issues can be transcendence when basic principles are followed. Therefore is corporate governance the cause of all troubles in Saccos?
Governance is a system designed to control and distribute power within an organization for economic, corporation and development (OCED). Corporate governance involves a set of relationships between a company management, its board, shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company and means of attaining those objectives and monitoring performance are determined.
Saccos were first introduced in Kenya in 1964. In 1969 the government made a radical relationship which has been the rapid growth of Saccos in Kenya. Today there are estimated 2600 active Sacco’s societies in Kenya which together have been able to mobilize Kenya shillings. In Kenya the ministry of cooperative development and marketing oversees Saccos activities but this moves to the Saccos Regulatory Authority (SRA) established by the new law. Currently Saccos are newly monitored. There is no annual or frequent examination of Saccos by the regulatory body. Moreover there is no comprehensive set of standards by which Saccos should comply. It is hoped that the new Sacco regulation will establish prudential standards to govern.
The standards will establish benchmarks and also enforce safe and sound principles to safe guard Saccos from losses. As financial institutions Saccos should be accountable to their members and to the public by enhancing excellence through
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