The Changing Landscape of Corporate Governance in East Africa

The past eighteen months have seen significant regulatory activity across East African capital markets, with implications for corporate governance practices, board composition, and disclosure obligations.

Key Regulatory Developments

The Capital Markets Authority's revised Corporate Governance Code introduces stricter independence requirements for board committees, enhanced disclosure obligations for related party transactions, and mandatory sustainability reporting for listed entities above specified thresholds.

These changes reflect a broader regional trend toward alignment with international governance standards, driven by institutional investor pressure and cross-border capital flow considerations.

Practical Implications

Boards will need to reassess committee composition, particularly for audit and risk committees where the new independence criteria are more restrictive than previous guidance. Many listed companies will require additional independent directors to meet the enhanced requirements.

The expanded related party disclosure regime captures a broader range of transactions and requires more detailed narrative explanation of commercial rationale. Companies should review existing related party frameworks and consider enhanced approval processes.

Strategic Considerations

Beyond compliance, these developments create opportunities for companies to strengthen governance as a competitive advantage. Institutional investors increasingly factor governance quality into allocation decisions, and robust governance frameworks can reduce cost of capital.

Companies should view the new requirements not as administrative burden but as framework for enhanced board effectiveness and stakeholder confidence.

This analysis reflects regulatory developments as of January 2026 and should not be relied upon as legal advice for specific transactions.