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Kenya Power pick for foreigner as CEO splits the board

Kenya Power pick for a foreigner as CEO splits the board amid opposition from the government.

Kenya Power has been forced to start the CEO search afresh after choosing an expatriate who faced criticism from the government and division among the board of directors.

According to three people with knowledge of the hiring process, Kenya Power’s outgoing chair, Vivienne Yeda, prepared a shortlist of three foreign candidates and favored an Australian as the choice to run the utility.

The shortlist was generated as a result of an executive search conducted by Deloitte East Africa. On May 6, the chair of Kenya Power was given the findings of the screening and a list of six suggested candidates, which included both domestic and international candidates.

The top management at the Energy Ministry, then led by Cabinet Secretary Monica Juma, was equally against appointing a foreigner to the top position out of concern for the reaction of nationalists who were keen on a Kenyan running the sole electricity distributor.

The company is looking to replace Bernard Ngugi, who left the company in August 2021 following a dispute in the boardroom and months after the court denied a plea to have him removed for prior procurement dealings.

Profitability dramatically increased from Sh874 million in 2004 to Sh2.6 billion last year, a complete turnaround for the power distributor that in 2003 was on the verge of collapse, registering a mind-boggling Sh4.1 billion loss, the highest in its history at the time.

Kenya Power is plagued with instability on its board and executive suite that has seen directors and managers quit in quick succession.

The utility company posted a net loss of Sh939.4 billion in the year to June 2020, the first loss in 17 years.

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A source at Deloitte said the requirements for the CEO’s position set by Kenya Power made it necessary to widen the search abroad.

“The requirements for the job made it difficult to get five or six local candidates for the shortlist. And, therefore, we had to look beyond Kenya,” said a top executive at Deloitte who sought anonymity.

“We fail to understand the noise around foreigners. We should be fixated on competence.”

The CEO hiring at Kenya Power caught the attention of the Auditor-General, who raised the alarm over the secrecy of the Deloitte report.

“No documentary evidence including reports of the consultant, evaluation results, recommendation of the consultant and board minutes and resolutions on the matter were not provided for audit review,” Auditor-General Nancy Gathungu said in an audit of Kenya Power books for the year to June.

She says Deloitte was paid Sh2.98 million to lead the CEO search.

“The expenditure incurred may have been wasteful since the position was yet to be filled,” she said.

“The management should provide all the required documents and information for confirmation.”

The job of picking the new CEO will start fresh under a new board tapped on December 16 following the ouster of directors linked to the Uhuru administration.

President William Ruto’s allies’ takeover of the Kenya Power board, offered the new administration the chance to pick a CEO of their choice.

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