Savings and Credit Cooperative Organizations (SACCOs) have been advised to adopt sustainable reporting to promote climate risk management and transparency and enhance confidence for their customers.
Having excelled in mobilizing Kenyans to form cooperatives and financial deepening through mobilization of savings, the institutions have been urged to strengthen their business strategies by encompassing emerging issues like global warming.
Cooperative Alliance of Kenya (CAK) Chief Executive Officer Daniel Marube said that adopting sustainable reporting is a demand in terms of the changing dynamics in the global market.
“Cooperative societies, mainly the Savings and Credit Cooperative Organization (SACCOs), are not in isolation, as they are in competition with the commercial banks in the deposit-taking business. The financial cooperatives are therefore required to widen their business approach by focusing on emerging issues, for example, the growing youth generation,” said Marube during the opening of a one-week audit, Governance and risk management forum for Cooperatives, held at the Voi Wildlife Hotel.
The forum in collaboration with the Institute of Directors Kenya (IODK), dubbed “Effective Risk Management and Audit Forum” for cooperative leaders, will provide a platform to review and examine supervisory role and audit functions, procedures and processes, controls and standards to test and determine their robustness in mitigating against risks and safeguarding the resources of the cooperatives.
According to Marube, adopting the new model of business development will assist in charting new avenues and enhance value addition of various products.
“Young people below 20 years are close to 70 percent of the country’s population, and therefore sustainable reporting will guarantee viable options to take care of the young generations,” he added.
Commercial banks and listed organizations have been announcing their sustainability reports, deeply expounding on their business strategies by focusing on emerging issues like climate change as well as how to tap the potential of the growing youth.
The CEO noted that sustainable reporting will help in taming malpractice boards of management of the cooperative societies committed to violating effective supervision and governance.
Boards of management have been struggling with challenges related to lack of capacity, assessment and monitoring, disconnect from business strategy, inconsistencies across the firms, and a compliance-oriented approach.
A governance expert, Zack Omukalla, noted that sustainable reporting will enhance compliance of outlined local and international standards and strengthen the capacity of boards of management.
“Kenyan cooperatives are some of the best institutions in the world, and thus if they agree to adopt workable reporting, they will achieve impressive business results. Sustainable reporting focuses on incorporating issues like climate change and enhancing farmers’ and depositors’ confidence,” said Omukala.
He added that a sustainability report should be part of the institution’s larger business plans, spelling out desired growth steps, and advised the board of management to focus on taking care of risks, supervisory and audit committees, and being environmentally conscious in addition to ensuring a quality workforce.
Nelly Okendo, a Director with Apstar Sacco, noted sustainable reporting enhances transparency in the operations of the institutions and can be able to support in a big way outlined business plans with human resources in charge able to respond to various issues.
“Audit and supervisory committees in deposit-taking SACCOs, if well strengthened and supported, will help in taming emerging challenges. CAK needs to heighten campaigns on sustainable reporting,” said Okendo.
CAK Board of Management Vice Chairman Cyrus Magut said that in order to respond well to changing business dynamics, directors and top management will undergo intensive training.
“Through training institutions managers will be more encouraged and have the capacity to adopt good business practices,” said Mr. Magut.
The Cooperative Alliance of Kenya’s (CAK) comprehensive leadership training is aimed at strengthening governance and accountability within cooperative societies.
The training, which brings together board members and supervisory and audit committees, is part of CAK’s national effort to address emerging gaps in cooperative leadership and sustainability.
The co-operative movement in Kenya is a critical sector in the country, as it plays a major role in aggregating resources and redistributing the same to power the engine of economic and social development in multiple sectors.
By Wangari Ndirangu
