Events of our last article clearly show the intention of Tony and the role played by corrupt Unaitas CEO Martin Muhoho to cover up his tracks and so much more on many ills that befell the organization during his tenure as CEO.
This shows why Tony took advantage of the entire situation to convince the board that indeed Martin was the best choice for the CEO position. Even after clearly emerging that Martin has no track record to show. At some point when Edwin was appointed to take over from Martin as the head of internal audit, he stumbled upon many malpractices. But in the spirit of comradeship, Edwin did not attempt to expose Martin’s failure having occupied the same position for at least more than 8 years.
Even after being deployed as the head of Risk and Compliance, Martin Muhoro failed to showcase any meaningful achievement of the same.
However, the following pointers will clearly show where the root cause of the matter lies.
Composition of the board members
The Board members are 9 in number. Most of the decisions taken to the board are never subjected to thorough questioning or interrogation. The reason is the nature of Sacco’s, which are mostly run as political outfits.
Board members are elected through a delegates system whereby each electoral unit has 15 delegates. In this regard, board members require only 7 votes in order for them to be elected. This makes it simple for the aspiring board members to bribe the seven and have their way easily into the board.
This means that once people find themselves on the board, they will work day and night to retain the position. This has since given a sitting CEO leeway to manipulate the board. It is for this fact that even sitting board members will always require a favour or two from the CEO hence they needed to be on the good books of the CEO. This explains the massive influence Tony commanded on the board members.
Again, before a critical agenda is brought on the board for deliberations, there is a lot of lobbying before the actual meeting is convened. Tony would individually lobby the board members. Sources within the board have since confirmed that through this trend, Tony managed to get his way on the board.
Appointment of CEO
Considering that Unaitas is a big institution holding assets and money worth billions of shillings, it is only fair that its governance is protected jealously. This calls for the appointment of competent persons and staff to various positions in the organization including the CEO.
Best practices across the industry and HR practices call for the board to invite applications from interested or potential individuals seeking to take up the position. The said individuals are then invited for interviews upon which they are tasked on various areas ranging from experience, vision for the institution, track record, and innovation amongst other things.
Actually, this process creates insights into what the candidate will be bringing on board once appointed. This process gives the board a clear picture of deciding the competence of a candidate.
In this case, the process above was never followed. No applications were invited to apply for the position. No interviews were conducted. In this case, the names of preferred candidates were floated. The board then took a vote. By the way, when things become thick, Martin could simply say that he did not even ask for the job, he did not apply for it he was merely appointed and he took it up.
This system is terrible. There is a risk of installing a clueless leader based on assumptions and how politically the person is connected to the board. There is also a risk of locking out brilliant minds. Unaitas is a professional financial institution and appointing a CEO with no justification or basis is equivalent to shooting the organization in the foot and therefore it will not move at all or go limping. Simply put, an organization in the standard of Unaitas can not and should never appoint a CEO by acclamation.
Board power games
Given that the board is the major decision maker, there is a need to have a sober board. In this regard, divisions and mistrusts characterize the Unaitas board. Most of the agenda is discussed in the village Barazas and hardline positions are taken. When the board meetings are convened, politics and gossip take precedence.
The board members also use their affiliations either by blood or romantic relationships with female employees from whom they get a lot of gossip to characterize and perpetuate hatred and infighting.
Voice of members
The board representation is biased. The current bylaw of Unaitas contravenes the spirit of the Cooperative Societies Act whereby it seeks to have the voice of the members heard. This means that Unaitas uses a delegates system whereby these are the people who attend the Annual General Meetings (AGMs).
All members of a Sacco or even companies are entitled to have a voice in the AGMs. Since Unaitas has more than 300, 000 plus members, it is impossible to have all of these attend an AGM. This would be worse than a political rally. In this regard, the law allows a delegates system whereby delegates represent all members. The law further states that the delegates should be selected in areas where the Sacco is operating.
This means that Unaitas needs to have representation of delegates from all its areas of operations. This calls for the expansion of the electoral zones to include Nairobi, Nakuru, Naivasha, Kisii, Eldoret and Kisumu. This will give an opportunity for members in these areas to have their voice count in the running of the institutions. Consequently, the board will be enhanced to give access to board members from other regions. This will give the board composition diversity and ensure diverse opinion is heard. Currently, the representation of board members is from a certain village in Muranga County.
Qualifications of Board members
The Sacco Societies and regulations Act requires that for you to be a board member, you must attain a certain fit and proper test, which includes academic qualifications.
This has been a challenge since some of the board members do not have the basic qualifications, which are O-level certificates or equivalents. With the introduction of fit and proper test by Sasra for all Sacco directors, it is envisaged that Unaitas will soon have more enlightened decisions that will be able to steer the growth of the organization to greater heights.
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