What Kenyan law expects of directors
The Companies Act 2015 codifies the general duties of directors. A director must act within the company's constitution, promote the success of the company for the benefit of its members as a whole, exercise independent judgement, and exercise reasonable care, skill and diligence. Directors must also avoid conflicts of interest, must not accept benefits from third parties because of their position, and must declare any interest in a proposed transaction or arrangement with the company.
These duties are owed to the company, and breaches can lead to claims against individual directors. Directors also carry statutory obligations around accounts, annual returns, registers and beneficial ownership disclosures, where failures can attract penalties.
What practical governance looks like
Governance is not only a legal checklist. It is a set of working documents and habits that make decisions traceable and defensible. For most private companies in Kenya, the core elements are:
- Articles of association that reflect how the company actually operates
- A board charter setting out the board's role, composition, meetings and delegations
- A conflicts-of-interest policy and a register of directors' interests
- Properly minuted board and shareholder resolutions
- Up-to-date statutory registers and beneficial ownership records
- Committee terms of reference where the board uses committees (for example audit or risk)
Listed, regulated and state-linked entities
Companies whose securities are offered to the public are also subject to the Capital Markets Authority's corporate governance code, and banks, insurers and other regulated businesses face sector-specific governance requirements from their regulators. We help boards map which rules apply and design one coherent framework rather than several overlapping ones.
Common risks and mistakes
- Directors approving transactions in which they have an undeclared interest.
- Decisions taken informally with no minutes or written resolutions to prove proper authority.
- Articles of association copied from a template that no longer match the shareholding or the business.
- Statutory registers and beneficial ownership filings left out of date — often discovered only during due diligence.
- Founders or family members holding management roles without clear delegations or accountability.
Who should seek counsel
- New and existing directors who want clarity on their personal duties
- Boards preparing for investment, lending, a sale or regulatory review
- Family businesses formalising governance across generations
- Company secretaries and in-house teams reviewing governance documents
How we work
- 1Governance reviewWe review your constitution, registers, minutes and board practice against the Companies Act 2015 and any sector rules.
- 2Gap reportYou receive a clear list of gaps and risks, prioritised by urgency and impact.
- 3Documents and policiesWe draft or update the articles, board charter, policies and resolutions you need.
- 4Board supportWe brief directors on their duties and advise on specific decisions as they arise.
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Frequently asked questions
Under the Companies Act 2015 a director must act within the company's constitution, promote the success of the company, exercise independent judgement, exercise reasonable care, skill and diligence, avoid conflicts of interest, not accept benefits from third parties, and declare any interest in proposed transactions with the company.
Yes. Directors' duties are owed to the company, and a director who breaches them can face claims by the company. Directors can also face penalties for certain statutory failures, such as filing and record-keeping obligations. The level of exposure depends on the facts, which is why early advice matters.
The law does not require every private company to adopt a board charter, but it is good practice. A charter clarifies the board's role, meeting procedures and delegations, and it is often requested by investors and lenders during due diligence.
Kenyan companies must keep a register of their beneficial owners — the natural persons who ultimately own or control the company — and lodge that information with the Registrar of Companies. Keeping it accurate is part of a company's ongoing compliance.
We recommend a review whenever the shareholding, board or business model changes significantly, and before any investment, financing or sale. Many boards also schedule an annual governance review.
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This page gives general information about Kenyan law and is not legal advice for your situation. Contacting us does not create an advocate–client relationship. Last reviewed 8 Oct 2026.