NSSF boardroom wars derail search for managing trustee

Partisan boardroom games and external political influences that have ensured that the National Social Security Fund (NSSF) has remained without a substantive managing trustee for almost five years seem to be at play once again.

NSSF invited applications for the managing trustee’s position on April 26. At the time, board chairman Julius Karangi told the Sunday Nation that he wanted to exorcise the ghosts of past recruitment failures and deliver the most qualified candidate to manage the giant pension fund.

INTERVIEWS

“As the chairman, I will ensure that the process follows the law and that no vital step is overlooked,” he said.

But six and half months down the line, the board is yet to communicate its decision, amid reports of attempts by certain individuals, working with some board members, to force through a candidate who ranked outside the top three in the interviews.

With the plot to ram through the candidate halted in its tracks by some on the board, the Sunday Nation has learnt that some members want to submit three names instead of one to Labour Cabinet Secretary Ukur Yatani so he can choose from the list.

But opposing board members want to submit just one name.

Those who want three names submitted, in the alternative, have been pushing for the position to be re-advertised, a proposal opposed by members who want the top candidate given the job.

CONTROVERSY

As a result of the stand-off, the board has yet to write a letter forwarding the name of the successful candidate to the Cabinet secretary.

The NSSF board is composed of Gen (Rtd) Karangi as the chairperson, Labour PS Peter Tum, Ms Jacqueline Mugo, who represents the Federation of Kenya Employers, Francis Atwoli, representing workers, Prof Dulacho Barako, Ms Damaris Muhika of the Central Organisation of Trade Unions (Cotu), Joseph Lekuton, Prof Marion Mutugi and Mark Obuya.

In the interviews conducted at Windsor Golf Hotel in Ridgeways, the long-acting managing trustee, Dr Anthony Omerikwa, was ranked number one. He has been in that position since 2015, when the last substantive managing trustee, Richard Langat, was forced out in a cloud of controversy.

Number two in the interviews was David Nyakundi Bonyi, who has served in various capacities at the Retirement Benefits Authority and also as the first CEO of the Retirement Benefits Regulatory Authority of Uganda. Number three was former Kenya Power Pension Fund CEO Henry Kyanda. They were followed by James Kimani and Stephen Gichiga.

FRUSTRATING 

Cotu Secretary-General Francis Atwoli, who sits on the NSSF board, on Thursday threatened to sue to compel the board to appoint a managing trustee.

“The chairman of the board together with the Cabinet secretary, whose offices have the duty to appoint and gazette, are yet to act and are now frustrating the whole process,” he said.

For two weeks, Gen Karangi has not responded to our calls and text messages seeking comment.

This was the third time the NSSF board advertised the managing trustee’s position.

On the previous occasions, the board failed to appoint anyone, either because of divisions in the board or because some candidates and their godfathers sponsored individuals to move to court to stop the process.

The position was advertised for the first time on September 9, 2016. Following interviews, former acting managing trustee Tom Odongo, Dr Omerikwa and the chief executive of the Local Authorities Pension Trust Fund Hosea Kili emerged as the top three candidates.

ALARMED 

However, the Ethics and Anti-Corruption Commission (EACC) on November 21, 2016 refused to clear Dr Omerikwa and Mr Odongo. Instead, EACC wrote to PwC which had been hired to conduct the interviews that only Mr Kili, a Mr Paul Mwai and Henry Kyanda had been cleared.

The current divisions within the board of NSSF means a longer wait for the Fund to eventually get a substantive managing trustee to steer the more than Sh200 billion Fund.

The appointment of a managing trustee would have also unlocked the opportunity for the Fund to fill other senior management positions substantively.

Of NSSF’s five general managers, four have been serving on acting capacities. At the level of managers, NSSF’s organisation structure provides for 17 positions overseen by the five general managers. Of these manager positions, eight are held by people who are serving on acting capacities.

Former Auditor General Edward Ouko was in 2018 alarmed when he found out that majority of the top managers of NSSF’s top executives have been acting for years.

VOLATILE

“No reasons have been provided for the continuous holding of senior management positions in an acting position,” Mr Ouko noted.

Besides the corporate governance question of many top executives in acting capacities, the Fund has also been a revolving door for the top management.

The job of NSSF’s managing trustee has over the years become one of the riskiest in the country’s corporate world given the high turnover.

The fund had 10 chief executives in the seven years to 2015, underlining the office as one of the most volatile in corporate Kenya. The bulk of the exits were tied to graft, which has dogged the NSSF for years.