Compliance Monitoring and Testing: A Critical Component of Corporate Governance in Kenya

As the Kenyan business landscape continues to evolve, governance, regulatory, and compliance issues have become increasingly complex challenges for organizations. With the introduction of new laws and regulations, boards are under pressure to ensure transparency, objectivity, and professionalism in their corporate governance practices.

The Importance of Compliance Monitoring and Testing

In this high-stakes environment, directors and management teams must be assured that they are meeting the required standards and adhering to regulatory requirements to avoid potential liability and reputational harm. Failure to comply with laws and regulations can result in significant financial penalties, making compliance monitoring and testing a critical component of corporate governance.

The Consequences of Non-Compliance

• Significant financial penalties
• Reputational harm
• Potential liability for directors and management teams

KPMG’s Solutions for Governance, Regulatory, and Compliance Challenges

To support Kenyan organizations in navigating this complex landscape, KPMG member firms offer a range of services designed to help directors and management teams meet the Governance, Regulatory, and Compliance challenge. These services include:

• Board Training: Providing directors with the skills and knowledge needed to effectively govern their organization
• Governance Framework Design: Helping organizations develop a robust governance framework that meets regulatory requirements
• Board and Audit Committee Assessments: Evaluating the effectiveness of boards and audit committees in fulfilling their oversight responsibilities
• Regulatory Code Impact Diagnostic: Identifying potential impacts of new regulations on an organization’s operations
• Sarbanes-Oxley Advisory Services for SEC Registrants: Helping publicly listed companies comply with Sarbanes-Oxley requirements
• EU 8th Directive Advisory Services: Assisting organizations in complying with the EU’s 8th Company Law Directive
• ‘J-SOX’ Advisory Services: Providing guidance on Japan’s Financial Instruments and Exchange Act

KPMG’s Approach to Compliance Monitoring and Testing

KPMG’s multidisciplinary teams of professionals have extensive knowledge of corporate governance developments both locally and internationally, combining process and system benchmarking expertise with organizational knowledge. The firm’s approach helps clients to better understand the regulatory environment and develop robust compliance management systems that ensure adherence to legal requirements and protect against potential penalties.

The Benefits of Effective Compliance Monitoring and Testing

• Protect directors from personal liability
• Protect companies from reputational harm
• Maintain a strong reputation in the market