The State of Corporate Governance in Uganda Summitcl

#SCGU18
Special thanks to ICGU

and Grant Thornton
THE STATE OF
CORPORATE GOVERNANCE
IN UGANDA
OCTOBER 2018
SUPPORTED BY
@summitcltd summitConsultingLtd www.summitcl.com
A Special publication by Summit Consulting Ltd.

The state of Corporate Governance in Uganda 2018.
All rights reserved
Special thanks to the Institute of Corporate Governance of Uganda

(ICGU) and Grant Thornton Uganda for organising and sponsoring
Corporate Governanve Awards 2018 respectively which provided
a basis for the publication by Summit Consulting Ltd which was
contracted to undertake field verification
All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by
any electronic, mechanical or other means, now known or hereafter invented, including photocopying
and recording, or in any information storage or retrieval system, without permission in writing from the
publishers.
©SCLpublication 2018
SUMMIT CONSULTING LTD | Improving Your Condition | THE STATE OF CORPORATE GOVERNANCE IN UGANDA
2
06 Executive
Summary
Corporate Effective
37
Corporate
08
Governance
Awards 2018 Governance
Pictorial processs
Summary
33 10
Statistics Succession
Planning
TABLE OF
CONTENTS
25
Sectoral Board
16
Analysis Approved Risk
Management
Framework
Business
23
Continuity
18
Best Practices
in Governance Plans and/
Reporting and or Disaster
Transparency Recovery Plans
21 Corporate
Social
Responsibility
WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 3

Foreword by the President, ICGU

Corporate Governance Awards 2018
recognize organizations with Insurance Companies; Banks and
outstanding achievements Micro Deposit Institutions (MDIs)
in the governance, risk and On 15th February 2018,
compliance fields in Uganda. companies begun submitting
The ICGU CG Awards play an their documents. A review of
important role in encouraging nomination feedback forms
improvements in the quality of against the minimum criteria
T
he Institute of Corporate CG, while reflecting changing was performed. All nominations
Governance of Uganda attitudes and expectations that met the stated criteria were
in conjunction with Grant among shareholders, investors shortlisted for further validation
Thornton organized the first and other stakeholders. ICGU by the Institute of Corporate
Corporate Governance awards leadership understands the Governance of Uganda. More
to reward institutions that best way to help corporate than 200 companies failed to
portray outstanding corporate entities, government and meet the eligibility criteria, citing
governance, adhered to its best the economy at large is to issues of missing documents, a
practices and implemented recognize entities that practice sign of lapse in their policies and
their policies neatly. With and demonstrate corporate procedures. Already, the award
these, companies are able governance best practices. At was exposing those companies
to benchmark their practices the start of 2018, posters and without all the right policies and
against the best practices blogs circulated around as the procedures, a clear picture of the
of corporate governance. It rumours about the impending state of corporate governance of
encompasses companies’ corporate governance awards Uganda. No wonder they have
performance and the board’s spread profusely. Although not been closing rampantly. After a
performance; appointment and so commonly practised in the thorough registration process,
assessment of the board of country, it drove a lot of attention. the portal was closed on 16th
directors; board membership, Almost every firm wanted to find April 2018. We are grateful to
committees and responsibilities; out where it was in their state our partners, Summit Consulting
how the board works with the of governance. A portal, www. Ltd, for writing this State of
executive; code of conduct in cgawards.icgu.org was later Governance Report 2018, out of
the companies and, last but deployed calling for nominees their own initiative. This report
not least, risk management, to register on condition that they provides insightful overview of
corporate social responsibility met certain criteria like being the field findings. The objective
and other obligatory internal tax compliant and possessing of this report is to provide
controls. a board of directors. In addition, lessons to all stakeholders and
The ICGU Corporate companies were to present membership to draw lessons
Governance (CG) Awards material that was bounded and improve their overall
between January 2015 and governance posture.
December 2017. We are publishing this report
The ICGU Corporate Companies were categorised in line with our mission “To
Governance (CG) Awards in different clusters, that is; large promote excellence in corporate
recognize organizations with private sector enterprises, with governance principles and
outstanding achievements turnover of more than Ugx. 100 practices.” Read it carefully. You
in the governance, risk and billion; Small and Medium Sized will learn a lot.
compliance fields in Uganda. Enterprises, with turnover of
less than Ugx. 100 billion; public
sector enterprises including
Ministries, Departments and MR. MICHAEL KAROKORA
Agencies of the government; MUGABI (Fcis)
Non-Government Organisations, PRESIDENT, ICGU
4
ICGU VISION
An enterprise sector that upholds
international best practices in Corporate
Governance
ICGU MISSION
To promote excellence in corporate
governance principles and practices
THEME
Corporate governance for performance and
sustainability
Plot 5, Katego Road, Kamwokya, Singapore Business Centre, Suite 1-03, P.o Box 27542
Kampala- Uganda. Tel: +256-414-250-239/7, 0774-644644 Email: icgu@icgu.org

“ This report clearly shows Ugandan

companies continue to struggle in areas
of Governance but are taking positive
steps towards improving their structures. “
7
5
Mostly because of
poor compliance to
Uganda’s businesses corporate
continue to struggle governance
with the limited practices
4 number of compliant
Boards................
Good corporate
governance looks at
not just how
businesses are run,
but to what 8
processes are they
6
run and the resulting
impact on the
business No wonder Ugandan companies
This report is based the Uganda continue to struggle
on the analysis of 45 Securities in areas of
companies only, Exchange Governance but are
has just taking positive steps
about 17 towards improving
companies their structures.
3
This means only about While banks are generally

22.39% of top private and compliant in many areas of
government institutions Corporate Governance,
had enough information to their sisters the insurance
complete the assessment firms that offer 60% of what
form. the financial institutions
offer are struggling with
these figures.
May 17th 2018,
2 Over 201 organisations
participated in the
9
nominations
T
here are so many organizations
our parliament actually a ‘biting’
that have put Boards in place but
parliament?” Can Parliamentarians put
are doing things, which do not
their feet on the floor and say no to
necessarily add value to the business.
the executive? If they can, then that
Knowing the Prince IV corporate
Parliament is ok, because then it is said
governance best practices is one thing.
to independent of any influence.
Putting such practices into action is
Uganda had its first Ever-Corporate
another thing altogether.
Governance Awards on May 17th 2018,
No one wants organisations with
which marked another milestone
window dressing Boards. Very many
in evolution of Uganda’s corporate
things go wrong with incompetent
structure. Over 201 organisations
Boards. In politics, you will ask; “Is
participated in the nominations by
6
submitting information via an online to mind. Most of these companies lack

form but only 45 companies made it the right policies and procedures.
to the finals. This means only about This report clearly shows Ugandan
22.39% of top private and government companies continue to struggle in
institutions had enough information areas of Governance but are taking
to complete the assessment form, positive steps towards improving their
which had key corporate governance structures. Some companies really
requirements including, codes of impressed in this analysis complying
governance and other best practices with almost every requirement although
corporate governance criteria. This only about 10% of those that met the
report is based on the analysis of 45 criteria had implemented these policies
companies only, and procedures.
This is a worrying statistic. However, While banks are generally compliant in
it is a positive move from the business many areas of Corporate Governance,
perspective. The corporate governance their sisters the insurance firms that offer
debate is shifting from emphasis 60% of what the financial institutions
on compliance to processes and offer are struggling with these figures.
The objective of
procedures to the effect on the Even the poorly structured SMEs are
the report is to
business of applying them. From doing better in many areas.
create awareness
emphasis on compliance to emphasis The objective of the report is to create
of the state
on stakeholder value delivery, good awareness of the state of corporate
of corporate
corporate governance looks at not governance in Uganda to inform policy
governance
just how businesses are run, but to and regulatory framework. There is
in Uganda to
what processes are they run and the need for automation of corporate
inform policy
resulting impact on the business. Good governance process like strategy
and regulatory
governance drives organizational execution and risk management.
framework.
resilience, productivity, stakeholder I thank the Institute of Corporate
There is need
value and economic development. Governance of Uganda for organising
for automation
Uganda’s businesses continue to the 2018 inaugural Corporate
of corporate
struggle with the limited number of Governance Awards, and Grant
governance
compliant Boards. No wonder the Thornton for sponsoring fully, the
process like
Uganda Securities Exchange has Awards, specifically for entrusting
strategy
just about 17 companies. This means Summit Consulting with managing
execution and risk
Uganda’s Stock market takes about the Awards process for quality
management.
two years to list a new company. management.
Mostly because of poor compliance It is against this background that we
to corporate governance practices as have published this report.
most businesses think the cost of good
governance is higher than the benefits.
It’s only after a long period of time, for
example, when original founders die
or exit, that corporate sustainability MUSTAPHA B. MUGISA
becomes threatened and sudden CHIEF EXECUTIVE OFFICER,
realization of good governance comes SUMMIT CONSULTING LTD

Effective Corporate Governance

Processes
Board meeting frequency

While SME’s recorded the only bi-annual meeting schedules, pulling
only 6.57% of the portion. Some companies really had worrying
figures. Some of the SMEs only scheduled Board meetings annually.
This is worrying, as the Board does not get enough time to make key
decisions. They most likely meet on the Annual General Meetings
(AGM) and never get time to influence decisions during the entire
year. The Board is too distant from the entire management team for
they only meet once.
2 3
The Board presence Board of directors

Only just 20% of the companies were assessed to Corporate governance is a fundamental
have clearly written Board papers that facilitated subject in Board organization and strategy
Boards in decision-making. For best practice, and this was the first area of scrutiny. Four
Board papers should be labelled “for a decision”, fundamental factors were analysed in this
“for information only”, of “for update”, to facilitate section, i.e
ease of use. And were a paper is labelled “for a a) Presence of the Board of directors and
decision”, it should clearly briefly give context, their constitution
2-3 options and analysis, and management b) Board meeting frequency
recommended option with justification. c) Board committee composition
50% of companies did not provide information on d) Frequency of periodic reports to the Board
the frequency of Board training. They also lacked
a clear scorecard for the Board of directors.
Risk Management Practices

These criteria were benchmarked on global best practices, which
include but not exhaustively;
i. Evidence of signed Board meeting minutes.

ii. Meeting quarterly to drive decision-making. Some Boards met
monthly, which undermines the power of the executive and increases
the cost of monthly remuneration as Board members are paid as if
employees with monthly allowances stressing organizational
bottom-line. Others met less than quarterly, which meant less
involvement in the decision-making, which is not best practice.
iii. A vast diversity in Board committees covering almost every industry
that affects the organization.
iv. Quality of Board Agenda; historical, strategic and future looking
8
Fig 1
NGOs have a fair Board-meeting Board meetings too. Having too many
schedule with 83.3% of them meeting Board meetings is not prudent as
quarterly. Public Sector Enterprises it undermines the decisions of the
also came in with a considerable 80% management. It also increases the
having quarterly meetings. Large burden on a company’s top-line, with
Private Sector pushed in 71.43% of their increased SG&A costs. Three of the 44
portion while SMEs had 60% of their companies met more than five times
meetings quarterly. NGOs and Private annually, with one meeting almost
Sector Enterprises meeting frequency every month, and another, as many as
The Board and consistency is attributed to good seven times
Meeting Agenda Board allowances collected. Same is Whereas all organizations reviewed
for most true for regulated entities like Banks and had minutes of the Board meeting,
companies lacked Insurance companies. the Board Meeting Agenda for most
conflict of interest Again, the insurance sector had just companies lacked conflict of interest
declaration about 50% of its meetings quarterly. declaration and gave a lot of emphasis
and gave a lot The other half met annually, seven of review of organizational historical
of emphasis times, five times or even monthly. reports and less on strategy and
of review of Another worrying statistic for the sector. innovation.
organizational Corporate Governance in the insurance We noted some companies held
historical reports sector continues to be plagued by several meetings over and above
and less on hesitancy. This is worrying considering the normal scheduled meeting. And
strategy and sample size analysed composed of the agenda at these meetings was
innovation. eight insurance companies accounting mainly covering operational issues.
for more than 30% of the sector Management expressed concern over
Like the saying goes, too much of the increased meeting frequency
anything is always bad. It goes for

Succession Planning
of the companies that were analysed

of companies assumed succession had plans of enhancing their
planning was an HR driven succession planning process with
paperwork exercise. Yet, the Board Board meeting minutes showing
and the entire top management evidence of opened discussion on
should be involved for best practice. the topic in question.
75.99% 18.18% 27.27% 20%
of Uganda’s companies took a pipeline

approach to development, i.e. their of the companies
succession planning catered for all automated their
levels in those companies with well succession planning
developed training programmes and processes.
guidance sessions for their staff to
induce healthy transition.
O
ne of the best practices of systems in place, only one of them
succession planning considered had integrated succession planning
was the development of a with performance management,
solid understanding of the most recruitment, selection, development
significant challenges their companies and rewards.
and industries are likely to face over A worrying 75.99% of companies
the next four to six years. Also, the assumed succession planning was an
skills and experiences of their leaders HR driven paperwork exercise. Yet, the
and successors will need to lead the Board and the entire top management
companies past those hurdles. should be involved for best practice.
Their succession
Another key consideration was the There was no way say, a CEO would be
planning catered
enterprises’ onBoarding process of accountable to a Board in this structure.
for all levels in
new hires and successors. While most Have commitment and involvement of
those companies
companies had this documentation in the CEO and Board. It’s not an HR driven
with well
place, they had no details or preplanner paperwork exercise – the CEO owns
developed training
processes of onBoarding, only about it, and has regular reviews with the
programmes and
30% had these in place and of those, entire Board or a Board subcommittee.
guidance sessions
only two had implemented them in Board members contribute to the
automated systems. process by providing feedback, asking
Of these two companies with great questions, and holding the CEO
accountable.
10
Fig 2
Only 18.18% of Uganda’s companies
took a pipeline approach to
development, i.e. their succession
planning catered for all levels in those
companies with well developed training
programmes and guidance sessions for
their staff to induce healthy transition.
However, 27.27% of the companies that
were analysed had plans of enhancing
their succession planning process
with Board meeting minutes showing
evidence of opened discussion on
the topic in question. In addition, only
20% of the companies automated their
succession planning processes.
86.95% have succession plans that
identify and develop new leaders to
replace predecessors for business
continuity
Succession Planning entails
companies having a clear framework for
There is need
Fig 3 succession that gives every staff equal
to enhance the
opportunity and clear guidelines on
transparency
how to attain the position in question.
of the process
Banks and NGOs that participated had
and criteria for
100% succession planning policies and
selection and
procedures in place, followed closely by
appointment of
SMEs (90%) and Insurance (87.5%).
Board members.
However, these statistics mean
Only one NGO of all
nothing if the policies and procedures
the organizations
are not clearly implemented. There is
we reviewed has
need to enhance the transparency of
ever advertised
the process and criteria for selection
for vacant Board
and appointment of Board members.
positions in the
Only one NGO of all the organizations
national papers.
we reviewed has ever advertised for
vacant Board positions in the national
papers; thereby attracting diverse
and knowledgeable members and
composing a multi-dimensional Board.
80
Many Boards have very few Women in
the Boardroom. Board diversity in terms
%
of gender balance is critical.
Even if the succession plans were
evident, they were inadequate. Most
of them had no clear job profiling with
only 25% of them clearly analysing
Over 80% of these companies had the skills of incumbents and skills
no software or platform that would gap for successors. A meagre 36.4%
monitor and automate succession of them had mentorship and training
planning. They used manual means programmes aligned to identifies skills
that are at most times biased. gaps

Board Approved Corporate Strategy
Boards were assessed on the following

best practices of corporate strategy;
I. Board approval of the strategy.
II. Availability of minutes showing
discussion on the strategy.
III. Strategy covering different time
There is need perspectives; it should be able to
to enhance the cover short term, medium term
transparency and long term
of the process IV. Whether the entire staff are aware
and criteria for of the company strategy and both
selection and internal and external stakeholders
appointment of were involved in the development.
Board members. V. Current strategy execution and
Only one NGO of all monitoring; how far with the
the organizations strategy currently, track sheets and Fig 4
we reviewed has scorecards.
ever advertised
for vacant Board 97.8% Boards play an active role in the
positions in the strategic planning process.
national papers. Almost every company had a Board-
97.8%
approved strategy except for one of
the SMEs. This is evidence that most of
the top companies in the country are
steered by Board strategies.
Meanwhile, only about 63% of the
companies had a Board meeting
minutes showing discussion of the
97.8% Boards play an active role in
strategy. Yet most of these strategies
the strategic planning process.
only covered long term, 4-years on
This is commendable.
average.
12
of the companies had

software that enabled
alignment to the of the companies
strategy. It is difficult to that had
examine strategy Board-approved
execution strategies had only
effectiveness, long-term plans but
something critical for had no clear
effective corporate financing strategies
4.55% governance. 90.91%
of these companies had

of them added short implemented a bottom-up
term and medium term strategy formulation in which
strategies to their 100% of their staff knew
policy. about it even at the gates.
The rest had issues with
22.73% either only top management
knowing about the strategy
4.55% or unclear knowledge about
most of the sections by the
general staff
Moreover, there was a general lack companies had implemented a

of software to automate strategy bottom-up strategy formulation in
execution, monitoring and performance which 100% of their staff knew about it
management. Only 4.55% of the even at the gates. The rest had issues
companies had software that enabled with either only top management
alignment to the strategy. It is difficult knowing about the strategy or unclear
to examine strategy execution knowledge about most of the sections
effectiveness, something critical for by the general staff. A strategy must be
effective corporate governance. inclusive even with the lowest of levels
Most of their strategies lacked a clear in an organization.
strategy communication and on—going All in all companies continue to
performance review against the set struggle with strategy formulation and
targets. This is the biggest challenge implementation either because there is
most Ugandan entities where they have limited time put into strategy planning
a good strategy but lack execution. or poor guidance from advisors and
90.91% of the companies that had management.
Board-approved strategies had only We noted with other surprise absence
long-term plans while a meagre 4.55% of clear corporate governance best
of them added short term and medium practices of target setting by the
term strategies to their policy. Board for the executive. Only 8% of
Another issue that cropped up in the evaluated companies were found
this section was the lack of staff to have a scorecard approved by
involvement. Only 22.73% of these the board against which to evaluate
executive performance.

Formal written policies covering Anti-

Fraud, Corruption, Whistleblowing, Ethical
Behaviour, Security, Health & Safety
There is need for Whereas many organizations have

organizations to anti-fraud and whistleblowing policies
consider web- and procedures, there is little evidence
based anonymous of effective implementation of same to
whistleblowing meet the minimum recommendations
systems that of the Whistle-blowers Protection Act,
meet minimum 2010. There is need for organizations
international to consider web-based anonymous
practices. whistleblowing systems that meet
minimum international practices.
70.45% of all the companies that were
examined had poor cyber resilience 70.45%
strategy. Only 45.5% of those that had it
in place had it automated. 56.82% of the
institutions conducted black box and
white box pen test annually showing
that the bigger percentage is exposed
to cybercrime. of all the companies that were
Only about 5% had whistleblowing/ examined had poor cyber resilience
Feedback or Tip-off Systems that strategy.
meet the requirements of the
Whistle-blower’s Protection Act
2010 undermining the element of
transparency in effective governance.
Many of these companies channel their
14
tips to third party providers in foreign countries, in shared call centres

which cast doubt on the effectiveness of such intervations.
Good news, 93.28% of the companies had a Board approved security
policy with on average 70% of the staff aware of its components. The
ones that weren’t aware of all its components still had an idea of the
policy in place.
At least 63.64% of the firms had ethical code of conduct in place.
Only 29.55% of the companies had a signed copy with employees
understanding all policies. The biggest challenge is in implementation
pf policies and procedures. A casual discussion with respective staff
indicated they lack clear understanding of the same.
5.00%
93.28%
Good news, 93.28% of the have effective whistleblowing

companies had a Board approved systems that are 99% anonymus, and
security policy with on average 70% internally managed which meet the
of the staff aware of its components. laws of Uganda WPA 2010

Board Approved Risk Management

Framework
88.9% 11.36%
of these companies have a well
enterprises have a risk
implemented software to
management framework in
facilitate on-going risk
place. However, many of these
assessment so that the risk
lack evidence of alignment to
register is kept up to date.
the ISO 31000,
11 %
of the companies have their
21 %
of these companies had risk
policy not Board approved registers in place to inform
internal controls prioritisation.
88.9% enterprises have a risk of a bad risk culture and a poor risk
management framework in place. management regime.
However, many of these lack evidence Only 11.36% of these companies
of alignment to the ISO 31000, Risk have a well implemented software to
Management Standard. Although facilitate on-going risk assessment so
the risk register is in place in many that the risk register is kept up to date.
companies, this is generated by A massive number of the registers seen
one person in the risk management were manually implemented with a
department. This indicated presence mound of outdated risks in a Ms Excel
16
Fig 5
All banks
inspected had the
Risk Management
sheet. insurance but only 66.7% of them had
Framework in
While more than half of these risk management frameworks in place.
place. They were
enterprises had this documentation The Regulators should be ware.
closely followed
signed and in place, there was no clear A meagre 29.55% in NGO’s implement
by Large Private
articulation of the Board’s risk appetite. a software to facilitate on-going risk
Sector Enterprises
Also, only 21% of these companies had assessment to keep the register up-to-
that pooled a
risk registers in place to inform internal date. More than 40% of these companies
substantial 87.5%
controls prioritisation. have manual registers, which is prone to
and Public Sector
A significant 11% of the companies outdated risks.
that did well
have their policy not Board approved. Another worry was with the expertise
with 83.3% of the
Most of them are in the pipeline while to operate these risk tools. Most of
portion.
others assumed Risk Management the companies assesed that had the
Framework was a management issue software only had a single person who
that did not require Board approval, could use these technologies and they
which is very wrong. had to spend 10-30 minutes contacting
All banks inspected had the Risk him to show automation. While there is
Management Framework in place. only a single risk champion operating
They were closely followed by Large the register, the other staff should be
Private Sector Enterprises that pooled a given essential knowledge on this so
substantial 87.5% and Public Sector that that there is no bureaucracy in updating
did well with 83.3% of the portion. system. For good risk management
NGO’s continue to struggle in presence, the risk owners (general staff)
managing risk with only 60% of them who run the day-to-day business should
having frameworks in place. The update risks in the register. This lack of a
shocker in this analysis was from risk culture organisation was attributed
the Insurance Sector. Most of these to the absence of staff awareness
companies cover people and offer training in enterprise risk management
risk management solutions in form of companywide.

BCP/DRP
A big 59.09% of Uganda’s firms

document their Business Continuity
Plans and/or Disaster Recovery Plans
on hard copy only. Another 22.73% 59.09%
have them in softcopy in PDF and of Uganda’s firms document their Business Continuity
Plans and/or Disaster Recovery Plans on hard copy
other Office products. 15.91% have both only.
systems in place while a worrying
6.82% of these have cloud solutions
to ensure availability of these plans
Only 5% of
5.00%
whenever a disaster or awareness of
the assessed recovery processes is needed. There
organisations were only three companies that had a
were found to fully implemented DRP solution to curb have evidence of having conducted a BCP/DR
dryrun test of their BCP plans.
have tested their these events.
BCP/ DR plans. A figure of 27.27% do not have updated
And those that BCPs/DRPs with most of them
had tested, did a having been last updated two years
dry run in respect ago. Considering the rising issues of
to IT recovery. cyberthreats and other data threats
that adapt with time, these companies
are potentially exposed to a number of
73.3% 27.27% 6.
business shuttering threats. Ahave
lotahasstrategy that do not have updated
15.91% of these
have both systems in
changed since the inceptionrecognises
of most of and
threats BCPs/DRPs with
most of them having place while a
solution
availability
risks facing their
these documents. It’s not a document companies been last updated worrying whenever
two years ago awareness
that is signed and just kept. It has to be processe
updated consistently, Only 5% of the
assessed organisations were found to
have tested their BCP/ DR plans. And
those that had tested, did a dry run
in respect to IT recovery. Over 80% of
the companies evaluated lack a clear
18
business impact analysis (BIA) showing

the mission critical assets and their
dependancies as well as their recovery
time objectives specifically RTO, RPO,
MTD and WRT. 73.3%
In spite of some of the implementation in have a strategy that
place, a meagre 4.55% of these companies recognises threats and
have tested their plans to make sure risks facing their
companies
they work efficiently with evidence of
documents showing drills and training
carried out in line with disaster recovery.
73.3% have a strategy that recognises
threats and risks facing their companies
Only 5% of
to ensure assets and personnel are 6.82%
protected in case of disaster of these have cloud
the assessed 13.3%, of the companies that had solutions to ensure
organisations Business Continuity and Disaster Recovery availability of these plans
were found to Policies and procedures in place had no whenever a disaster or
have tested their awareness of recovery
BCP/ DR plans. processes is needed.
And those that
Fig 6
had tested, did a
dry run in respect
to IT recovery.
Board approval or any meeting minutes the organisation considering a disaster

showing discussion of the matter at requires alot of money to recover from.
hand and were exposed to a number of We noted with concern the limited view
threats that could impair their business and understanding of Risk management
growth or even shutdown their premise. inform of insurance cover only.
The same percentage had nothing Positively, the highest percentage had
in place but were in the process of these plans in place with 54% of them
formulating them. This means that integrating the two documents. Data
BCP/DR is not considered as a mission centres, insurance covers, backups,
critical priolity at Board level . This and more measures have been put in
increases the risk of going concern for place. Most of the measures in place

are to protect the very delicate batches clear Business Impact Analysis (BIA) to
of data that are very essential in this clearly define mission critical items and
era of big data. No wonder firms are prioritize security accordingly.
heavily investing in data centres and are Another worrying stance was the
backing up most of their “treasure”. cybersecurity hygiene in most of the
While all insurance and banking organisations with no provision of real
companies had BCPs and DRPs in time backup of all core database and
place, large private sector chipped in network logs to external servers that
with 75% and SMEs with 62.5%. Public have limited access. Only 43.18% of the
Sector Enterprises had just about 60%. companies assessed, had real-time
The worst prepared companies for backups.
disaster were the NGOs pooling just No company we reviewed had a
about 16.67%. Most of the companies clear budget line to cater for BCP/
had non-in place and some that had, DRP implementation. No clear incident
had no Board approval. There was only response and recovery team structure,
one significant representative that had communication flow with current email,
but had their plans designed for the phone and direct line was seen in most
international perspective as most of companies.
their policies and procedures where Only 30% banks had clear response
made from their headquarters abroad. plan in place. This is worrying. The
However, only 29.55% of the BCPs ability to respond to an incident is
cover all the business operations of debatable for most organisations,
the company. Of these, 60% had no reviewed.
20
Corporate Social
Responsibility
87.23% 12.77% 4.26% 4.79%

2.55%
Not every of Ugandan firms do from NGOs. NGOs in The worst contributor to
organisation has not have planned of these were their defence said most CSR was Insurance
plans of giving back Corporate Social public sector of their work was CSR companies
to the community Responsibility (CSR) enterprises, and Corporate Social
budgets. Investment (CSI),
87.23%: Not every organisation has of their work was CSR and Corporate
plans of giving back to the community Social Investment (CSI), which meant
12.77% of Ugandan firms do not have that almost all their money was spent
planned Corporate Social Responsibility on helping communities.
(CSR) budgets. They in other words The worst contributor to CSR
spend as they wish based on achieving was Insurance companies, which
specific bottom-line targets, which represented 4.79% of the unplanned
is not best practice in Corporate share. These entities are basically run
Governance. on driving top-line rather than having
2.55% of these were public sector community interest. This is bad. Their
enterprises, with another 4.26% from Boards should look into this area with
NGOs. NGOs in their defence said most utmost priority.
WRITTEN BY Summit Consulting Ltd | www.summitcl.com| summitSTRATEGY 21

On a positive note, Banks, Large for either CSR or CSI activity. This
Private Sector Enterprises and SMEs undermines the Board’s influence in
all had planned CSR budgets. Going social activities as they cannot confirm
forward we would like to see every where the companies’ contributions
sector being represented in these areas have gone to. Letters of appreciation
that give the company a good public also show companies practice what
image. they preach.
However, over 31.82% of the companies Only 31.82% of the companies with
either misplaced or did not have letters planned CSR documented self-
of appreciation for CSR, which exposed assessment of their CSR activity. Two
their lack of organisation especially in of these do social media monitoring of
documentation of core governance, their activity.
A myriad 75% of these companies did
not properly file letters of appreciation
22
Best Practices in Governance Reporting

and Transparency
Reporting and Transparency
Sector
No Annual Report Annual Report Published Website
10
SME’s
SME’s
SME’s
NGO’s
Large
Public
Banks
Banks
NGO’s
NGO’s
Large
Banks
Insurance
Large
Insurance
Public
Public
Insurance
Fig 7
We view corporate governance as the subset of a firm’s contracts—both

formal and informal—that help align the interests of managers with those of
shareholders. Therefore, corporate governance consists of the mechanisms
by which shareholders ensure that the interests of the board of directors and
management are aligned with their own.4 We also view this definition to be
broad enough to encompass all of the firm’s contracts that assist in aligning
the incentives of the firm’s shareholders, directors, and managers. For
example, when a firm’s creditors have the right to monitor the firm’s financial
reporting, those creditors may help align the interests of managers and
shareholders; therefore, a debt contract that allows such monitoring could
constitute a governance mechanism
With respect to the board’s monitoring and oversight responsibilities,

hypotheses frequently emphasize that the firm’s operations and information
environment influence the monitoring costs and benefits of certain board
structures. Specifically, it has been argued that firms in more uncertain
business environments.

100% of the
banks that Only 65.2% give shareholders and These are companies to which
participated had other interested people information stakeholders trust with their monies,
annual reports about their activities and financial savings and other treasures and yet
considering the performance they’re not as transparent as desirable.
tight regulation Most notable companies have a The worst performing sector was for
surrounding this website in place and at least 65.2% the Small and Medium Sized Enterprises
industry while of these have a brand manual and an that scored a meagre 30% considering
sectors like SMEs annual report in place to guide investors most of them are sole proprietorships
struggled as many and inform stakeholders. with small Boards and others where less
cited they were 100% of the banks that participated than two years old.
avoiding rivals had annual reports considering the tight Organizations that got higher scores
using their data regulation surrounding this industry generally have elaborate annual
against them. while sectors like SMEs struggled as reports in which the governance
many cited they were avoiding rivals disclosures, business model, strategic
using their data against them. focus, risk management practices and
While all banks had annual reports in CSR activities are properly explained.
place, 85.71% of the large Private Sector Some companies especially banks
followed suit. NGOs were the closest to and all listed companies have mature
the two giants with at least 66.67% of governance practices; with a clear
their contributors having these in place. Board induction program, Board
Another shocking statistic from the charter that is practical and IT systems
Insurance sector saw only about 37.5% to facilitate effective management of
of them publishing annual reports. Board affairs.
24
Sectoral Analysis
We analysed sector per sector in general to streamline the best and worst players.
Large Private Sector Public Sector Enterprises
of these had succession number of organisations with a

87.71% planning in place. Being 86.9% succession plan, evidence of
relatively large and handling a terrible corporate governance
lot of money (Over Ugx. in public institutions
100billion),
of these enterprises had a risk A good return on publishing

87.5% management framework, 20% annual reports sees the
representing 18.52% of the public sector
entire 88.9% of the economy,
of their Boards meet quarterly

while others meet in uneven 60% 80% 80%
sequences. This is 16.06%
71.43% contribution to the entire 73.91%
quarterly Board spectrum. Public sector
have these plans public enterprise Boards meet
None of these companies’ enterprises are
in place to recover quarterly, while the remaining
Boards met bi-annually, also patently
from disaster and ones meet unevenly. This is
guard against 17.99% of the 73.91% of involved in CSR,
business quarterly meetings which is having CSR
decapitating risks. deemed best practice, budgets in place.
Small and Medium Sized Enterprises
NGOs
Small and Medium Enterprises
49% (SMEs) are spread across all
sectors, accounting for 49% of
the service sector On top of knowing the succession
planning process adequately, their
Board-approved strategy is passed
From which 100% along to all employees and executives.
With 100% of them having these
strategies, they are propelling corporate
33% 10% 08% governance in the country.
in commerce Manufacturing
Others
and trade,
of NGOs publish annual
reports, which allots for just
Over 2.5 million people are 66.67% 16.67% of the entire
employed in this sector and economy.
account for approximately 90%
of the entire private sector,
generating over 80%
87.5% NGOs are the worst

prepared for disasters.
4.02% Already without adequate
of NGOs hold their risk management
Board meetings framework, their BCP and
quarterly, representing DRP documents are just
18.7% of the 4.02%
wholesome.

Large Private Sector

The private sector in Uganda has country’s economy, which consists of
been growing steadily in the country. industries, and commercial companies
This has been attributed to the good that are not owned or controlled by
investment environment in the country, the government. It excludes banks and
which has attracted both local and insurance companies. The companies
international investors. This analysis must have a turnover in excess of Ugx.
seeks to scrutinize an organization in the
Of the entire
portion of
73.3% presence Fig 8
of DCP/DRP
documentation at 100 billion annually. covered a close figure of just about
companies, they 87.71% of these had succession 25.01% of the entire annual reports
had 18.11% of this planning in place. Being relatively large published.
share, being part and handling a lot of money (Over Ugx. 71.43% of their Boards meet quarterly
of the top three 100billion), they all had Board approved while others meet in uneven sequences.
after only banks strategies. However, one of the This is 16.06% contribution to the entire
and insurance. companies did not clearly communicate 73.91% quarterly Board spectrum. None
the strategy to its employees, as they of these companies’ Boards met bi-
had no idea of it. annually,
87.5% of these enterprises had a risk Of the entire portion of 73.3%
management framework, representing presence of DCP/DRP documentation
18.52% of the entire 88.9% of the at companies, they had 18.11% of this
economy, the second best performer in share, being part of the top three after
risk management implementation. only banks and insurance.
The sector also contributed a All large sector enterprises had a CSR
significant 21.43% to the annual report budget. It is good to give back to the
publishing metrics, coming in second community especially when you are
after the highly regulated banks that making supernormal turnover.
26
Small and Medium Sized Enterprises

Small and Medium Enterprises owned Small and Medium Enterprises
(SMEs) are spread across all sectors, operating in the country; with turnover
accounting for 49% of the service less than Ugx. 100bn.
sector, 33% in commerce and trade, 90% of the SMEs that were assessed
10% in manufacturing and 8% in other had succession planning in place, a
fields. Over 2.5 million people are very promising figure in this sector.
employed in this sector and account This represented 17.89% of the entire
for approximately 90% of the entire succession-planning present in the
private sector, generating over 80% of economy.
manufactured output that contributes The same percentage goes for Board-
20% of the gross domestic product approved strategy, which represented
(GDP), according to Uganda Investment 15.25%, the worst contribution to the
Authority (UIA). This analysis seeks average Board strategy implementation
to examine privately and publicly metrics. Most of these SMEs were
Most of these
SMEs were
running on
employer’s
intuition not Board
approval. The
ones that had
strategies did not
look like they were
using them. Only
a few of these
had implemented
their strategies
Fig 9
efficiently.
running on employer’s intuition not companies’ status quo.

Board approval. The ones that had Only 60% of the SMEs that were
strategies did not look like they were audited had quarterly Board meetings,
using them. Only a few of these had which was 13.49% of the entire average.
implemented their strategies efficiently. Three of them had bi-annual meetings
While at least 88.98% of businesses while the rest had either annual or
had their risk management frameworks monthly meetings.
in place, SMEs contributed only 15.87%. SMEs were well prepared for disaster
Most of their frameworks were either and had business continuity plans in
not Board approved or had none. place. At least 62.5% of them had these
However, with just 7.5% of the 65.22% papers in place, affecting 15.09% of the
of companies publishing annual reports, entire 73.33% presence.
they recorded the worst turnover in All SMEs where compliant with
this section. Only about 30% of SMEs CSR budgeting criteria contributing
publish annual reports. Stakeholders significantly and should be advised to
seem to remain in the bleak of their continue the same trend.

Public Sector Enterprises

As the government strives to provide and Parastatals.
services to their citizens across the Only 7.95% of public sectors
country while despite ability to pay, contributed to the 86.9% number
many public-sector enterprises have of organisations with a succession
been set up to this effect. This analysis plan, evidence of terrible corporate
seeks to study the leading organizations governance in public institutions,
in the public sector that are outstanding something that continues to hinder
in Corporate Governance in the country. public enterprises and parastatals,
This cuts across Commissions, Agencies most government agencies have been
Evidence of
terrible corporate
governance in
public institutions,
something that
continues to
hinder public
enterprises and
parastatals,
most government Fig 10
agencies have
been managed by managed by the same people for a transparency of the taxpayers’ money.
the same people long time. There is no clear way of 80% of public enterprise Boards meet
for a long time. succession in these entities. quarterly, while the remaining ones
There is no clear There were positives in Board- meet unevenly. This is 17.99% of the
way of succession approved strategy where all surveyed 73.91% of quarterly meetings which is
in these entities. government MDIs had one in place and deemed best practice,
it had been approved by the respective While business continuity is essential
Boards. Most of their employees were in the private sector, public sector
well aware of it and the arrangement of enterprises are not sleeping either.
the strategy documents was very tidy. 60% of them have these plans in place
They also represented well in to recover from disaster and guard
possession of a risk management against business decapitating risks. This
framework attributed for a substantial apportions 14.49% of the all-inclusive
17.64% of the 88.9% companies with this 73.3% of all the sectors in place.
documentation. Public sector enterprises are also
A good return on publishing annual patently involved in CSR, with 80% of
reports sees the public sector attributed their entities having CSR budgets in
for 20.01% of the entire 65.22% share. place.
However, being public enterprises,
it would be best practice if all
companies published annual reports for
28
NGOs
Over the recent years, the number both local and international.
of groups and institutions that are All NGOs have succession planning in
entirely or largely independent of place, which is a very positive initiative.
government and characterized primarily 100% of all their employees know the
by humanitarian or cooperative, rather succession process and can adequately
than commercial objectives, have prepare themselves to fill in the
been set up. These Non-Governmental footsteps of their predecessors.
Organizations take on various activities On top of knowing the succession
in the country. This analysis seeks planning process adequately, their
to diagnose the NGOs’ Corporate Board-approved strategy is passed
Governance practices in the country, along to all employees and executives.
NGOs are the

worst prepared for
disasters. Already
without adequate
risk management
framework, their
BCP and DRP
documents are
just 4.02% of the
entire 73.3% of the
incidence.
Fig 11
With 100% of them having these headquarters of most companies being

strategies, they are propelling corporate overseas. It would be too costly for
governance in the country. them to have quarterly meetings.
However, they were the worst NGOs are the worst prepared for
prepared for risk mitigation with a low disasters. Already without adequate risk
turn up in risk management framework management framework, their BCP and
checks. They apportioned on 12.7% DRP documents are just 4.02% of the
of the 88.98% companies with these entire 73.3% of the incidence.
policies and procedures with just 60% of With 66.67% having CSR budgets, the
the NGOs having this documentation. other portion attributes their business to
Only 66.67% of NGOs publish annual be Corporate Social Investment, enough
reports, which allots for just 16.67% of to cover the gap.
the entire economy.
A massive 83.3% of NGOs hold their
Board meetings quarterly, representing
18.7% of the wholesome. The other
portion works annually due to

Insurance
In life, many unplanned events companies.

happen from day to day. To minimize At least 87.5% insurance companies
the negative effects of these instances, have succession planning in place
Insurance companies have been set apportioning for 17.39% of the entire
up to provide coverage, in the form slice. It is good to have clear succession
of compensation resulting from loss, planning in place.
damages, injury, treatment or hardship These companies follow a Board-
in exchange for premium payments. approved strategy with 100% of them
This analysis seeks to identify Corporate having this implemented which is
Governance of companies providing promising for the highly demanding and
insurance services to Ugandans. This growing sector.
includes both life and non-life insurance Yet, being risk solution providers,
It seems insurance
companies are the
most cost efficient
companies in
meetings. Only
37.5% of them
meet quarterly,
14.11% of the
quarterly portion.
Fig 12
it’s surprising that not all Insurance companies are the most cost efficient
companies have risk management companies in meetings. Only 37.5%
frameworks in place. They allocated of them meet quarterly, 14.11% of the
only 14.11% to the entire 88.98% of quarterly portion. This means they
companies with this documentation. I prefer to cut costs by meeting annually.
guess they only offer solutions but do Yet, these companies are highly
not practice what they preach. competitive and need frequent Board
Only 16.67% of the entire 65.22% of checks.
annual reports publishing companies Being risk solution providers, it is of no
are for insurance. They literally hide surprise that all insurance companies
most of their information from clientele are covered by reinsurance policies and
and other stakeholders. have BCPS and DRPs in place.
Based on eight insurance companies Regrettably, they are the sector with
that perticipated in the corporate the least number of companies having
governance awards. It seems insurance a planned CSR budget contributing to a
meagre 12.27% of the budgeted 87.23%
of CSR economy wide.
30
Banks and Micro Deposit Institutions (MDIs)
Even if banks
and MDIs
outperformed Fig 13
the rest of the
industries in many
of the areas, only The need for financial services those that withdrew to pick a leaf from
40% of these were in the country has been growing the other institutions.
open to corporate proportionately with the economy. As Even if banks and MDIs outperformed
governance people try to find the best financial the rest of the industries in many of the
assessment. This institutions, this analysis seeks to areas, only 40% of these were open to
is a worrying picture the banks and MDIs in terms of corporate governance assessment. This
statistic in an Corporate Governance. is a worrying statistic in an industry that
industry that faces All banking institutions that were faces the biggest threats in governance.
the biggest threats assessed complied with King IV Big banks have fallen in the past due to
in governance. considering their regulation is very tight. poor governance. However, with only
It is promising to see that our banking two fifth of the entire industry was open
institutions are doing well in corporate for assessment.
governance considering one of the
top banks previously closed due to
bottlenecks in the system. We advise
of these were open to

corporate governance
assessment. This is a
worrying statistic in an
industry that faces the
biggest threats in
40% governance.

Banking Continues to thrive whilst

Insurance sector struggles implementing
the right policies and procedures
We scored the industries against areas. In fact, one of the SMEs had the
each other where banking emerged best filing procedures, a promising
as the leading practitioner of corporate metric for the growing sector and this
The insurance
governance with a score of 34, closely undermined the much-anticipated
sector was the
followed by large private sector who banking sect.
worst performing
While a significant portion of Boards
sector in corporate scored 25. Public Sector Enterprises
(20), NGOs (19), and SMEs (18) followed meets quarterly, this doesn’t guarantee
governance, only
respectively; Insurance remains the Board approved documents as we
scoring 16 from
worst at complying with corporate noticed in most of the companies.
the weighted
governance in Uganda with just 16. Most of the risk management
index. Indeed,
Only MDIs and large private sector frameworks lacked important sections
there are many
scored above average. However, the like the risk logs, register. There was
areas to improve.
performance that stunned analysts was an impressive number though that
the turnover from the insurance sector, had their risks listed which is a positive
a highly regulated segment, doing move from the businesses. However,
very badly in corporate governance. there was a small number of companies
The insurance sector was the worst that implemented risk management
performing sector in corporate software to ensure
governance, only scoring 16 from the Another worrying area was the
weighted index. Indeed, there are many possession of Business Continuity and/
areas to improve. or Disaster Recovery Plans. Though
Publishing and sharing annual reports most companies clearly expressed
remains the worst performed area with their business continuity verbally, their
most companies in Uganda ignoring documents didn’t say much. Very little
this crucial metric. While most of the cover was given to most of their delicate
companies blamed it on not exposing and yet important areas like data
themselves to competition, this does security. Only a handful of firms had
not conform to corporate governance implemented data security measures.
best practices. When all’s said and done, we are not
Although MDIs dominated the there yet but are getting there.
proceedings, their filing and
organisation was also lacking in many
32
Summary Statistics
Fig 14
Fig 15
Fig 16
Fig 17

Fig 18
Fig 19
34
Team biographies
Mustapha B. Mugisa is one of those rare

people who provide value-based consulting
to professionals and corporate entities who
demand the very best. He is a prolific speaker, a
strategy, risk and anti-fraud expert.
Francis Xavier Mukembo.is an experienced data

analytics professional who provides consulting
services in different analytics solutions for
decision-making, business intelligence, data
visualisation, performance and risk management.
He has worked on projects with various MDAs,
banks, insurance, telecoms, and more, in areas
of Forensics, Risk, Business Intelligence and
Security.

About the Institute of Corporate

Governance of Uganda (ICGU)
HISTORICAL
The Institute of Corporate CONTEXT
Governance in a resolution that Uganda (and enterprises, business leaders and the
of Uganda (ICGU) was incorporated in Course the other East African
modules Countries)
are diverse with a general public on several themes in the
How it all started should
December 1998 as a company limited range of establish
themes: national institutes area of Corporate Governance. The
by guarantee. It is a
ICGU was born out of a seriesnot-for-profit that would promote good Key goals in this area are to promote
organization The Institute derives its • corporate
Principles governance,
and practices of both at
Corporate corporate governance principles and
ICGU
of high level meetings. The
mandate from the Memorandum
most important ones being the and national and
Governance regional levels within practice, to attain broader endearment
Articles of Association and it is governed • theThe role and functions of
framework of the East African the Board and to improve ICGU’s image and
Edinburgh Commonwealth
by an 11- member Council and a • Cooperation. Corporate Governance and visibility as the “flag-bearer” of corporate
Heads of Government Meeting
Secretariat headed by a Chief Executive appreciating financial statements governance in Uganda.
Officer.(CHOGM) held in October 1997, • The Task strategy
Business Force
the Commonwealth Technical • Risk Management Partnership with Development
Focus Policy Conference held in London • Subsequent to the above,
Corporate Governance a
and the Law Partners
1998 • task force ofGovernance
ten (10) and eminent
ICGU’sin
GOOD GOVERNANCE
April 1998
strategic focus and the June
embodies five key Corporate Human
regional
objectives, namely:Workshop on Corporate Ugandans Resourcewas put in place to set ICGU is in partnership with the Global
Governance held in Kampala with • upCompany the Institute.
Law These included: Corporate Governance Forum of the
provided for in the Memorandum
delegates from the private and Mr. William Okecho, was the first
• Building national capacity in • Corporate Ethics and Social World Bank (GCGF), Commonwealth
corporate governance; Responsibility andSecretariat,
Articles International
of Association Corporate
public sectors of Uganda, Kenya, Chairman, and is now Member of
• Broad communication and • Policy formulation and stakeholder (appendix
GovernanceI), had
Networkeleven
(ICGN) (11)
and African
Tanzania and Rwanda. Parliament, West Budama County
awareness; management members.
DevelopmentIn addition
Bank, to the
African Corporate
North; Ms. Agnes Kataama (RIP),
Out of ICGU
• Advocacy initiativelaws
for targeted at another
and • was Corporate GovernanceMr.
Vice-Chairperson; businessthree
andWillie mentioned
Governance above,(ACGN),
Network it alsoInstitute
policies to enhance corporate operating
meeting held in Arusha in January Ogule (RIP); Mr. James Kalebbo; environment. had ofMr. Leo
Directors,Kibirango,
South Ms.
Africa, Fawn
Centre for
governance; • ICT and
1998, at a training programme Mrs. Fatumah Nsereko; Ms. Fawn Corporate Governance Cousens,
Corporate Ms. Grace
Governance, Kabunga,
Kenya, Institute
• Membership development and; • Conducting effective Board
organized by the Commonwealth Cousens; Capt. Gad Gasaatura; Dr. William Kalema (who was meetings of Directors, Nigeria, IoD Mauritius, IoD
• Sustainability of ICGU as an • Board dynamics and the concept
Secretariat and the World Bank, Mr. George Abola; Mrs. Catherine always represented by Dr. Maggie of Ghana, IoD Tanzania, IoD Zimbabwe,
organization.
ICGU was able to provide Masaba groupthink IoD Egypt,
Kigozi), Mr. IoD
SamTunisia,
OworiIoD(RIP),Malawi, IoD
• Meeting Wafaana and Mr.ofVincent
the Board F.
Directors’ Morocco, IoD Mozambique, IOD Kenya,
probing questions to the trainer Kaheeru who served as Secretary M/S PricewaterhouseCoopers
ACTIVITIES UNDERTAKEN expectations. Institute of Directors Ethiopia, among
who thought theCORPORATEanswers to the to the Task Force. represented by the Country
TO PROMOTE others.
queries would be best answered Leader, Mr. George Egaddu and later
GOVERNANCE IN UGANDA In addition, we offer customized This collaboration has made it possible
by the then upcoming policy packages Mr. William
to meetOkecho did needs
specific as perMr.for
not serve Joseph
ICGUBaliddawa,
to access theCapt.
latest information
The forum / conference
development of his full term
that was to customer
Corporate needs. and was consequently Gad Gasaatura and Mr. SimonGovernance.
on the subject of Corporate
take place
Governance in inUganda
April 1998isin London.
being succeeded by Mr. James Kalebbo Rutega.
undertaken through the propagation Technical as Chairman of the Task Force.
Assistance The increase in individual and corporate
of bestICGUpractice CEO and highestwas standards
privileged ICGU conducts specific technical membership and visibility of ICGU
to conduct
of ethical have attended the London
mainly through The Task for
the assignments Force
big anddid small
its work
entities. has helped to enhance Corporate
followingmeeting,
activities:where he represented Such between June 1998include
assignments and December
developing Governance in Uganda.
our country Uganda and was the handbooks 2000 when onthe first Council
corporate was
governance,
Chief Development
Membership Organizer of the follow codes electedof by the members.
conduct and best practice, Numbers do matter and thus the
up Workshop that took place in evaluation of board performance and partnerships and member development
ICGU June is 1998 a in membership-based
Kampala supported developingThe Council board manuals, among which is our key outlook.
organization that draws its membership others.
by the Privatisation Unit of the The first Council was headed
from diverse
Ministryprofessions,
of Finance, businesses
Planningand and by Late Mr. Pius K. Bahemuka For more information;
institutional sectors now at 94 corporate These assignments
Economic Development and the as President; Late Mr. Willie enhance performance
members and 700 individuals. of corporate boards and provide Website: www.icgu.org
World Bank, which culminated in Ogule as Vice-President I and
Training in Corporate Governance vital benchmarks for strengthening
the setting up of the local Institute. Mr. Vincent F. Kaheeru as Vice-
ICGU conducts customized compliance. Email: icgu@icgu.org
workshops and general
The three meetings discussed trainings in President II and Secretary to the Facebook: Institute of Corporate
Corporate Governance for Boards Council.
Public The
Sensitization first Council, as Late Mr. Pius
Governance of K. Bahemuka
Uganda
corporate governance culminating
and Executive Managers of Public and Tel: 041-4-250239/7
Private Enterprises, SMEs and Non- ICGU conducts Public awareness lectures
Governmental Organizations. for Institute
directorsofand Corporate Governance
senior executives of of Uganda (ICGU)
ICGU
5
GOOD GOVERNANCE
36
PICTORIAL

38
About the Sponsors of the ICGU Corporate Governance Award
Grant Thornton
Grant Thornton
“We have a strong focus on maintaining our ethics and
honesty, experience, personalized services and techniques.
“We
Our key havestrength
a strongisfocus
offering onamaintaining
tailored service our ethics
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and know-how. personalized
Our clientsservices
are ourandbesttechniques.
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Our key strength is offering a tailored service through Anil Patel, Managing partner
experience and business
Grant Thornton is a leading know-how.
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helps clients arewith
We work closely our best
Grant advocates.”
Thornton member firms in
dynamic organizations to unlock their potential for Africa and around the world. This means we can offer
growth. Our brand is respected globally, as one of the Anil Patel, Managing partner
our clients access to services from around the network
Grant
major Thornton is a leadingorganizations
global accounting business adviser that helps
recognized by We work closely with Grant
to establish and grow their business Thornton member
in the region.firms in
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capital markets, regulators and international standards potential for Africa and around the world. This means we can offer
growth. Our brand is respected globally, as one of the
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Experience to services from around the network
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We have over and50grow
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About Summit Consulting
Summit Consulting Ltd is a professional services
firm offering proactive and Practical Toolkits and
Educative Workshops that help our clients to improve
by selling more, cutting costs, raising employee morale
and transforming the business. We are the trusted
advisor and counselor to many of the most influential
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We improve the client’s condition in our three
specialty service offerings:
1. summitFORENSICS: Prevent revenue leakages and

grow your Organisation. We offer both proactive and
reactive forensics to give you peace of mind. Manage
fraud risks. Investigate fraud cases. And never again
have staff for disciplinary action give you a headache.
Visit www.summitcl.com/forensics and download free
fraud risk assessment tool .
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stakeholders happy. Get practical tools to grow your
profits and transform your business. Craft a winning
strategy. automate your risk management processes.
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improve your condition.
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security solution. From external security reviews to
overall IT governance and vulnerability assessments
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resilience framework to your IT strategy and enterprise
Visit www.summitcl.com to strategy. This helps you save money, time and worries.
download the state of Corporate
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The State of Corporate Governance in Uganda Summitcl

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#SCGU18

Special thanks to ICGU

A Special publication by Summit Consulting Ltd.

Special thanks to the Institute of Corporate Governance of Uganda

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 3

Foreword by the President, ICGU

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 5

“ This report clearly shows Ugandan

This means only about While banks are generally

submitting information via an online to mind. Most of these companies lack

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 7

Eﬀective Corporate Governance

Board meeting frequency

The Board presence Board of directors

Risk Management Practices

i. Evidence of signed Board meeting minutes.

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 9

of the companies that were analysed

75.99% 18.18% 27.27% 20%

of Uganda’s companies took a pipeline

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 11

Board Approved Corporate Strategy

Boards were assessed on the following

of the companies had

of these companies had

Moreover, there was a general lack companies had implemented a

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 13

Formal written policies covering Anti-

There is need for Whereas many organizations have

tips to third party providers in foreign countries, in shared call centres

Good news, 93.28% of the have effective whistleblowing

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 15

Board Approved Risk Management

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 17

A big 59.09% of Uganda’s firms

business impact analysis (BIA) showing

Board approval or any meeting minutes the organisation considering a disaster

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 19

87.23% 12.77% 4.26% 4.79%

WRITTEN BY Summit Consulting Ltd | www.summitcl.com| summitSTRATEGY 21

Best Practices in Governance Reporting

Reporting and Transparency

We view corporate governance as the subset of a firm’s contracts—both

With respect to the board’s monitoring and oversight responsibilities,

WRITTEN BY Summit Consulting Ltd | www.summitcl.com| summitSTRATEGY 23

Large Private Sector Public Sector Enterprises

of these had succession number of organisations with a

of these enterprises had a risk A good return on publishing

of their Boards meet quarterly

87.5% NGOs are the worst

WRITTEN BY Summit Consulting Ltd | www.summitcl.com| summitSTRATEGY 25

Large Private Sector

Small and Medium Sized Enterprises

running on employer’s intuition not companies’ status quo.

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 27

Public Sector Enterprises

NGOs are the

With 100% of them having these headquarters of most companies being

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 29

In life, many unplanned events companies.

Banks and Micro Deposit Institutions (MDIs)

of these were open to

WRITTEN BY Summit Consulting Ltd | www.summitcl.com/summitSTRATEGY 31

Banking Continues to thrive whilst