Kenya’s Capital Markets Authority published a draft in November 2025 to replace the Code of Corporate Governance Practices for Issuers of Securities to the Public, 2015.
Ten years passed. Markets moved. So did expectations around climate, ethics, and disclosure. The new draft answers that shift.
The Old Ethics Chapter Disappears
The 2015 Code carried a standalone chapter on Ethics and Social Responsibility. The 2025 draft removes it. That does not mean ethics drops off the agenda. Instead, the drafters spread ethics duties across the document: into board responsibilities, internal controls, and disclosure rules. A company can no longer treat ethics as a side chapter to skim. It sits inside every function the board runs.
Environmental and Social Pillars Get Their Own Weight
The 2015 Code focused on governance. The 2025 draft adds explicit attention to the other two letters in ESG: environment and society.
Boards must now embed sustainability into strategy, operations, and risk management, not just report on it after the fact.
Six Chapters, Three Tiers
The draft organizes itself into six chapters:
- Commitment to Corporate Governance and Sustainability
- Composition, Structure and Functioning of the Board
- Accountability, Risk Management and Internal Control
- Rights of Shareholders
- Governance of Stakeholder Relations
- Transparency and Disclosure
Within each chapter, the Code separates content into three tiers: Principles (broad goals), Mandatory Practices (minimum standards companies must apply and explain), and Best Practices (higher benchmarks companies may choose to adopt).
This structure mirrors the IFC Corporate Governance Framework and the G20/OECD Principles of Corporate Governance, giving Kenyan issuers a document that maps onto global reference points.
Apply and Explain, With Real Deadlines
The Code keeps the Apply and Explain approach from 2015: companies apply the principles and explain how, including any gaps and the plan to close them. What changes is the clock. Issuers get one year from the date the Authority publishes the final Code to implement its mandatory provisions. Miss that window, and the company must tell the Authority why, along with a timeline to reach full compliance.
Boards also carry a new reporting duty. Every annual report must include a statement on the status of governance and how far the company has come in applying the Code. The Authority does not do this alone. It works with licensed securities exchanges, the Registrar of Companies, and the courts to enforce the standard.
The Bottom Line
The 2025 draft does not tear down the 2015 framework. It builds on it, then pushes further: ethics gets embedded rather than boxed off, sustainability becomes a core strategy input rather than an add on, and the reporting clock starts the moment the Authority signs off.
For boards, the work is not just to read the new Code. It is to trace where the old ethics chapter went and confirm those duties now live where they belong, inside every committee and every report.
