Sacco Boards’ headache over exiting CEOs


By Jackson Okoth

A trend is rapidly emerging where DT-Saccos prefer to look inwards when seeking to replace Marketing Managers, Finance Managers, Chief Executive Officers or even Chairpersons to the Boards of Directors.
Those Saccos with no suitable replacements from within the society would rather poach these executives from other saccos rather than extend their recruitment outside the industry.
“Saccos that lack internal capacity to fill vacancies that arise in top executive positions, including that of CEOs, would rather poach from other Saccos,” said James Muchira, Chief Executive Officer, Shoppers Sacco Society Limited.
He said that professionals from other sectors find it difficult to work in the sacco environment. This is especially so in those Saccos where the roles of management and the board are intertwined with some of the directors directly involved in management matters.
“It is better the devil you know than the highly qualified banker or engineer that you do not know. Individuals recruited from private companies usually find it difficult to work in Saccos. This is why many societies are now resorting to recruit members of their senior executive suites using internal mechanisms,” said Muchira.
DT Saccos that have attempted to recruit from outside the Sacco industry have had to undergo significant challenges in terms of ensuring continuity and progress.
A most recent example is Mwalimu National Sacco, who recruited Robert Shibutse- a career banker as its Chief Executive Officer to replace long serving Joshua Ojall.
Shibutse only lasted at Mwalimu National Plaza, Upper Hill, for three years before the Society’s Board of Directors replaced him with Alphonse.M. Kaio, the Society’s Chief Accountant.
Shibutse was headhunted from Equatorial Commercial Bank (ECB) Kenya Limited in 2014, to replace former Mwalimu National CEO Joshua Ojall.
“Those Saccos seeking to replace top executives using an internal process can only do so if they have the right kind of personnel from within. If this is not the case, a Sacco would rather poach from another Sacco,” said Charles Ochieng Ngutu, Director-Taraji Sacco Society Limited.
Ngutu added that Saccos have a unique management and business model and would, therefore, recruit internally to retain the status quo.
In the case of Taraji Sacco, the Society had to poach from Chemelil Sugar Sacco when seeking to find a replacement for its then outgoing CEO. “Although he had left us for greener pastures, we know his abilities while he was with us and that is why we went looking for him,” said Ngutu.
Stima Sacco, considered as one of the top five largest DT Saccos in Kenya, in terms of balance sheet size, used an internal recruitment process to replace Paul Wambua with Chris Ngeta Useki
The Stima Sacco Board of Directors picked Chris Ngeta Useki as Acting CEO on 18th October, 2016. He subsequently performed the functions of this office until 18th August, 2017 when he was confirmed as the new CEO by the Stima Sacco Board of Directors.
Useki, an insider within Stima Sacco, is a professional accountant with 16 years of experience in financial management.
He was first appointed as the Stima Sacco’s Internal Auditor in 2002. He was later promoted to the position of Finance Manager in 2006 before succeeding Wambua at Stima Sacco.
“It is a healthy practice to internally recruit high calibre personnel. This is because this individual will already be well acquainted with the normal internal processes and does not have to begin anything from scratch. Internal recruitment also serves to provide motivation and growth within the society, thereby increasing output. However, the person must also have the required qualifications to do the job,” said Mackline Wamukota, CEO Ng’arisha Sacco Society Limited.
At Ukulima Sacco, Richard Nyaanga was confirmed as CEO last year. Nyaanga was first appointed as the Ukulima Sacco’s Internal Auditor in 2002 after spending time teaching at the then Co-operative College of Kenya (now Co-operative University). He was later promoted to the position of Finance Manager in 2006.
Then in 2010, Nyaanga was appointed Deputy Chief Executive Officer of Ukulima before taking over as CEO when his predecessor Henry Nakaya, retired.
“We have witnessed Saccos that attempt to recruit CEOs from outside the Sacco suffer dire consequences. Internal recruitment of a CEO picks an individual who has insights into how the Sacco works, where it has come from and where it is headed and has deep understanding of this Society’s cultural background”, said James Mogaka, Manager- Ukulima Housing Co-operative Society Limited.
He added that the insider will also have institutional memory and history of the Sacco. An outsider with a PhD or any other superior qualifications cannot be able to match these qualities that someone on the inside has.
When Alex Ndegwa left Mentor Sacco as CEO, the Society’s Board of Directors picked on the Society’s then Finance Manager Mrs Joyce Waceke Ndegwa, to replace Alex.
Mrs Ndegwa was first appointed as finance manager at Mentor Sacco in July 2011.
This is after serving as an accountant at the same Sacco between 2008 and 2011. She was later promoted to be the Society’s Deputy CEO before rising to become CEO.
When Board of Directors of Boresha Sacco attempted to advertise the position of CEO, then and now still held by Moses Chebor, there was pandemonium and bitter protests by members. The Boresha Sacco Board was subsequently forced to pull down the advertisement. Chebor has remained in this position.
Similar difficulty of finding a replacement for a long serving CEO is also being experienced at Gusii Mwalimu Sacco.
When the CEO Charles Omwansa announced his retirement, there was hue and cry within the board and management of the Society, forcing him to withdraw the plan. Omwansa, therefore, remains the CEO of the vibrant Gusii Mwalimu Sacco.
At Imarisha Sacco Society, there was trouble when it advertised the position of CEO. The Board later changed its mind and promoted the Deputy CEO to take over the top position.Matthew Rotich, who was the Acting CEO of Imarisha Sacco, replaced Kipruto Sigei, who served the Society for a long time and with dedication before his retirement in 2017. Rotich was Sigei’s dependable deputy.
Other DT Saccos that have recruited internally to replace either the marketing, CEO or Chair of the Board of Directors or poached from other Saccos include Winas Sacco, KITE Sacco, Ollin Sacco, Solution Sacco, Imenti Sacco and Thabiti Sacco among others
At Ollin Sacco, former CEO Richard Njagi Ndaka retired and has been succeeded by Mr John Gathige, who is the Society’s former finance manager. Likewise, Solution Sacco former CEO Justus Mburugu has retired and has been succeeded by Mr Daniel Marete, the Society’s former finance manager.
Imenti Sacco former CEO Judy Ngatha left the Society and has been replaced by Mbaabu Mutwerandu, the Society’s former Human Resources Manager.
Allan O. Kawa was this year appointed the new Chief Executive Officer of Kisumu-based KITE Sacco Society Limited. He replaced Joseph Oganga, who was the former CEO. Kawa has previously been the Internal Auditor at KITE Sacco.
“Saccos have a unique business model and business environment and a special kind of membership. For instance, we have members who have a poor savings culture at KITE Sacco. It is therefore critical to recruit a CEO who understands the preferences and needs of members and also has insights into the economic environment and climate under which the Sacco is operating,” said Allan Kawa, CEO of KITE Sacco Society Limited.
Kawa added the trend whereby Saccos are recruiting top managers internally could change in the future as more Saccos undergo rebranding, open more branches beyond their traditional catchment area and acquire a national outlook.
Other internal recruitments that have occurred in the Sacco industry include that of Steve Oluoch, who is now the new Board Chairman of Taraji Sacco Society Limited. Oluoch was previously Vice Chairman of the Board. He replaces Charles Ochieng Ngutu-who, however, remains a director of the Society.
Raphael Kailemia was recently elected Chairman of the Board of Directors, Dhabiti Sacco Society Limited. He replaces Jason Kimbui, who has since retired and passed on.
Robert Omari, formerly Treasurer at Trans National Times Sacco was elected Chairman of the Board of Directors of TNT Sacco to replace long serving Chairman Christopher Nyongesa, who has since retired.
Former County Sacco Marketing Manager Patrick Nthiga has joined Winas Sacco as the new Finance Manager.
K-Unity Sacco Marketing and Customer Care Manager Mr. Joseph Ndiritu, who left the Society, has since been replaced by Mr Ian Nderitu, formerly of Wananchi Sacco in Nyeri.
Everlyn Olunja, formerly of Mwalimu National, ditched the Society and is now the Communication and Corporate Affairs Manager at UN Sacco.

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