MPs step up push to cap terms of State firm bosses at 3 years

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CEOs of state corporations will serve for a three-year term, with an option of an extension for a similar period, if MPs approve a Bill that seeks a uniform statutory tenure.

The National Assembly Transport and Infrastructure Committee has stepped up the push for the three-year tenure through the State Corporations (Amendment) Bill, 2026.

“The principal object of this Bill is to establish a clear and uniform framework on the tenure of CEOs of state corporations,” committee chairperson George Kariuki said.

“The Bill seeks to promote certainty, predictability and consistency in leadership transitions in the corporations.”

Mr Kariuki added that the proposed measure aligns with the principles of good governance, accountability and transparency, as set out in the Constitution and the Mwongozo Code of Governance for State Corporations (2015).

“It will address challenges that have arisen due to the absence of a uniform statutory tenure, including disputes, litigation and arbitrary extension of office,” Mr Kariuki said.

The Bill proposes changes to section 6 (2) of the State Corporations Act by introducing sub-section 2A, which sets a term limit for CEOs of state corporations.

“Section 6 of the State Corporations Act is amended by inserting the following sub-section after sub-section (2) – a chief executive appointed under subsection (1)(b) shall serve for a term of three years renewable for one term,” the Bill says.

“A person serving as chief executive on the commencement date of this Act shall continue to serve for the unexpired period of their term on the same terms and conditions.”

The Bill does not preclude the removal of a CEO before the expiry of their term for just cause, if such removal complies with the provisions of the Fair Administrative Action Act, the Employment Act and any written law.

It provides for transitional provisions to the amendment in order to ensure the legislation applies prospectively to new or renewal of contracts for current chief executives of state corporations.

Section 6 of the State Corporations Act establishes the composition of State Corporations Boards.

“Unless the written law by or under which a State Corporation is established or the articles of association of a State Corporation otherwise require, a board shall, subject to sub-section (4), consist of a chairperson appointed by the President who shall be non- executive unless the President directs, the chief executive, the Principal Secretary of the parent ministry, the PS National Treasury, the Attorney-General or his representative and not more than 11 other members not being employees of the State Corporation, of whom not more than three shall be public officers, appointed by the Cabinet Secretary,” the Act says.

“Every appointment...shall be by name and by notice in the gazette and shall be for a renewable period of five years or for such shorter term as may be specified in the notice, but shall cease if the appointee serves the CS with written notice of resignation, or is absent, without the permission of the Cabinet Secretary notified to the Board, from three consecutive meetings.”

Reporting originally appeared via Business Daily. Read the full source for additional context.