NAIROBI, July 8 – Safaricom Plc is set to seek shareholder approval for a series of governance changes that would allow its majority shareholder, Vodafone Kenya, to nominate the company’s chief executive officer following its acquisition of a controlling stake in the Kenyan telecommunications operator.
The proposals will be presented to shareholders at Safaricom’s Annual General Meeting on July 31, marking one of the company’s most significant governance reviews since Vodafone Kenya increased its ownership to 55%.
Vodafone Kenya became Safaricom’s majority shareholder after completing the acquisition of the Kenyan government’s 15% stake on June 30. The transaction, valued at approximately $1.6 billion, raised Vodafone Kenya’s interest from 39.9% while reducing the government’s shareholding to 20%. The remaining shares continue to be held by public investors through the Nairobi Securities Exchange.
Under the proposed amendments, Vodafone Kenya would have the right to submit a shortlist of candidates from which Safaricom’s board would appoint the chief executive, provided the company continues to own more than 50% of Safaricom’s issued share capital.
The governance changes also seek to preserve the company’s local leadership profile. According to the proposals, the board would be required to promote “a predominantly Kenyan character” within Safaricom’s senior management and executive committee.
The proposed framework would retain a minimum board size of seven directors, with no maximum limit. It would also preserve the existing arrangement allowing both Vodafone Kenya and the Kenyan government to appoint one director for every complete 10% shareholding they hold.
Despite becoming a minority shareholder, the Kenyan government would continue to retain certain strategic rights. Any material change to the Safaricom brand or expansion of the business beyond Kenya and Ethiopia would still require government approval.
The proposed governance changes require the backing of at least 75% of shareholders to take effect.
The vote comes as Safaricom continues to strengthen its governance structure following a major shift in its ownership, balancing greater influence for its majority shareholder with safeguards designed to preserve the company’s strategic national interests.
