Corporate governance plays a pivotal role in ensuring organizational sustainability and resilience, especially in times of crisis. It encompasses the systems, principles, and processes by which companies are directed and controlled, balancing the needs of various interest groups such as shareholders, management, customers, suppliers, financiers, government, and the community. Globally, crises such as financial recessions, pandemics, and political upheavals have repeatedly exposed weaknesses and tested the robustness of governance frameworks. Kenya’s evolving corporate governance landscape offers compelling empirical evidence of how good governance, or the lack thereof, can significantly influence a company’s ability to navigate turbulent environments. Examining the Kenyan context alongside global best practices offers valuable lessons for organizations operating in volatile settings.

Corporate governance frameworks emphasize four core principles: accountability, transparency, risk management, and stakeholder engagement. The Organisation for Economic Co-operation and Development (OECD) articulates these principles as foundational for building trust and sustainable economic growth (OECD, 2015). Kenya, with its unique socio-political and economic challenges, has experienced multiple crises. In some cases, governance failures have exacerbated problems, while in other cases, sound governance has helped organizations withstand shocks.

The 2007–2008 post-election violence in Kenya stands as a profound test of corporate governance across sectors. During this period, widespread political violence disrupted the economy, impacting financial institutions, manufacturing firms, and retail companies. The banking sector, a critical pillar of the economy, faced intense stress due to liquidity pressures triggered by panic withdrawals. For instance, Cooperative Bank of Kenya, one of the country’s largest financial institutions, was forced to enhance transparency and improve communication with clients to contain panic. Research by Mwangi (2010) highlights that banks with more independent boards and clear risk management protocols fared better during the crisis. This mirrors global lessons from the 2008 global financial crisis, where banks with stronger governance and risk oversight demonstrated greater resilience (Bushman & Smith, 2001). However, some Kenyan banks exhibited delayed reporting and opaque communication, amplifying public distrust, a governance failure also observed globally in weaker financial institutions during crises (Laeven & Levine, 2009).

Manufacturing companies like Mumias Sugar Company further illustrate governance challenges during crises. Already struggling with weak internal controls, poor board oversight, and political interference, Mumias’ operational and financial difficulties intensified in the wake of the political violence (Waweru & Uliana, 2014). The collapse of Mumias reflected the consequences of failing to align corporate governance with effective risk management and ethical leadership principles, as widely recognized in global standards such as those outlined by the International Finance Corporation (IFC) (IFC, 2019). Moreover, the case underscores the risks of political entanglement in corporate boards, which the World Bank and OECD caution against, advocating for board independence to safeguard decision-making (World Bank, 2017).

Similarly, the retail sector was not spared. Uchumi Supermarkets, a major Kenyan retailer, faced significant supply chain disruptions and declining revenues during the 2007–2008 crisis. Investigations revealed governance failures including inadequate board independence, conflicts of interest, and poor financial controls (Gichuki, 2016). These issues hampered Uchumi’s ability to respond swiftly to the crisis, ultimately pushing it toward near collapse. The experience aligns with global research indicating that companies with diverse and independent boards tend to manage crises more effectively by providing strategic oversight and mitigating executive risks (Adams & Ferreira, 2009).

The economic slowdown between 2015 and 2016 presented another governance test, with Kenya Airways and Kenya Power & Lighting Company (KPLC) providing notable case studies. Kenya Airways, despite being a flagship national carrier, struggled with poor governance characterized by political interference and weak board oversight. Kamau (2019) documents how political appointments to the board compromised strategic decision making, resulting in mounting debt and operational inefficiencies. This governance failure mirrors global cases such as flag carriers in other emerging economies, where political meddling and lack of professional oversight have compromised financial performance (Mellahi & Wood, 2003). In contrast, governance reforms aimed at increasing board independence and professionalism have been linked globally to improved airline performance (IATA, 2017).

KPLC’s struggles during the economic downturn were aggravated by governance lapses, including corruption allegations and lack of transparency. Media reports and regulatory audits exposed systemic mismanagement and a governance culture that tolerated unethical practices (Daily Nation, 2016). These issues directly affected the utility’s financial stability and public trust. Globally, poor governance in public utilities has been shown to undermine service delivery and investment, emphasizing the need for rigorous governance frameworks and anti-corruption mechanisms (Transparency International, 2018).

The COVID-19 pandemic further tested governance capacities worldwide, and Kenya was no exception. Equity Bank Kenya demonstrated effective governance by swiftly adopting digital banking solutions, restructuring loan portfolios to assist clients, and maintaining transparent stakeholder communication (Equity Group Annual Report, 2020). Such responsiveness reflects global best practices identified by the World Economic Forum (2020), which underscores the importance of agility, transparency, and ethical leadership in crisis management. Conversely, Kenya Airways continued to grapple with governance challenges, requiring government bailouts and restructuring. The airline’s ongoing difficulties, despite repeated crises, reflect entrenched governance weaknesses, including politicized leadership and inadequate strategic oversight (Kamau, 2021). This case reinforces the global consensus that strong corporate governance structures and independent boards are crucial for effective crisis navigation (OECD, 2020).

Small and medium enterprises (SMEs) in Kenya, which form the backbone of the economy, were disproportionately affected by COVID-19 due to lack of formal governance systems and risk preparedness (Kenya Association of Manufacturers, 2021). This mirrors findings from global SME studies, where governance capacity is strongly linked to business survival during economic shocks (OECD, 2020). The Kenyan experience highlights the need for scalable governance education and supportive policies tailored to smaller firms.

Beyond economic and health crises, Kenya’s recent youth upheaval, particularly the Generation Z-led protests from mid 2024 through 2025, have brought governance issues to the forefront of national discourse. These protests, fuelled by concerns over systemic corruption, lack of transparency, and unaccountable leadership, have demanded comprehensive governance reforms in both public and private sectors. The youth’s use of digital platforms to expose malpractices and mobilize public opinion represents a modern evolution of stakeholder engagement and accountability, consistent with the “digital governance” concept gaining traction globally (Ketter, 2019). The protests have pressured state institutions to improve oversight of state-owned enterprises and compelled private companies to reconsider corporate social responsibility and governance standards (Daily Nation, 2024). This civic activism aligns with global trends where social movements increasingly hold corporations and governments accountable, emphasizing environmental, social, and governance (ESG) criteria (Sullivan & Mackenzie, 2020).

Kenya’s National Youth Service (NYS) scandal in 2015 is another critical example illustrating the consequences of poor governance. The misappropriation of millions of shillings exposed weak internal controls and governance oversight in a key public institution, triggering public outrage and reforms in public financial management (Transparency International Kenya, 2016). Globally, such high-profile corruption cases have been pivotal in driving governance reforms and enhancing anti-corruption frameworks (Transparency International, 2018).

Conversely, some Kenyan companies have improved governance through deliberate reforms. Kenya Commercial Bank (KCB) introduced board reforms in 2020 to strengthen independence and reduce political interference, which corresponded with improved financial performance and stakeholder confidence (KCB Group Annual Report, 2020). This case illustrates how aligning with global best practices—such as having independent non-executive directors, clear fiduciary duties, and transparent reporting—can enhance governance outcomes even in politically complex environments (Tricker, 2019).

Kenya’s evolving legal and regulatory framework has also sought to align corporate governance with global standards. The Companies Act (2015) introduced clearer director responsibilities and stakeholder considerations. The Capital Markets Authority’s Corporate Governance Code (2015) echoes OECD guidelines by emphasizing board diversity, transparency, and risk management (CMA, 2015). The Institute of Directors of Kenya (IOD-K) actively promotes ethical leadership and governance education. Nevertheless, enforcement remains a challenge, particularly during crises when institutions may be overstretched or politicized. The World Bank underscores that enforcement capacity is as critical as the laws themselves for governance effectiveness (World Bank, 2017).

To build crisis resilient governance, Kenya’s corporate sector can draw from global best practices. These include fostering board independence and diversity, institutionalizing comprehensive risk management frameworks encompassing political, economic, and social risks, and adopting transparent stakeholder engagement protocols. Ethical leadership and zero tolerance for corruption must be promoted through formal policies and cultural change. Additionally, supporting SMEs with governance training and incentives can strengthen the overall economic fabric. Leveraging technology for real-time monitoring, disclosure, and communication enhances responsiveness and stakeholder trust, a trend accelerated by the COVID-19 pandemic globally (WEF, 2020).

In conclusion, Kenya’s corporate governance landscape offers rich empirical lessons on the importance of good governance during crises. From political violence and economic slowdowns to a global pandemic and youth led social movements demanding accountability, governance has been a critical determinant of organizational resilience. While governance failures have worsened some crises, adherence to principles of accountability, transparency, risk management, and stakeholder engagement has enabled others to navigate successfully. Aligning Kenya’s governance reforms with global best practices such as those advocated by the OECD, IFC, and World Bank and strengthening enforcement mechanisms will be essential for building a corporate sector capable of weathering future shocks and contributing to sustainable economic development.

CPA CS Dr. Ben Kipngetich Samoei Profile

CS CPA Dr. Ben Kipngetich Samoei Sumi, Ph.D., is a seasoned professional with extensive experience of over 20 years in Governance, Administration and Finance. He has held senior roles in the County Government, various Public Institutions and has resolute experience in corporate board affairs