How a focused board of directors is steering innovative and ambitious Sacco to growth and profitability
By George Gichuki
Effective corporate governance is a key pillar to the growth of organizations. When the roles of the board and the management are clearly outlined and separated, then unnecessary conflicts between the two parties are avoided. Whereas the board is mainly charged with the responsibility of driving the organization’s strategy, the management is required to implement the same. To that end, Mentor Sacco has a board of directors (elected by the members and headed by the chairman) as well as a management team (headed by the CEO).
After the retirement of Mr. Simon Mukunu as the chairman of the Sacco’s board of directors, Mr. Anthony Muriuki is now the man at the helm. “My vision as the new chairman of Mentor Sacco is to steer the growth and expansion of the organization so that we can have a national presence and more members in the near future,” shares Mr. Muriuki.
According to Mr. Muriuki, the major role of his board is to formulate policies that guide the Sacco in its day to day business as well as its long term goals. “Once we develop the policies as a board, we pass them to the CEO who in turn guides the management team on how to execute them,” he says. “We ensure that the CEO and the management team have a clear roadmap on how to meet the goals outlined in our policies, but that does not mean meddling with the day to day affairs of the Sacco,” he notes.
Majority of Mentor Sacco’s members are in the teaching profession. For that reason, the board is very keen on attracting members from other professions and also the business community so as to sustain its long term goal of having a national presence and more capital. Moreover, the government nowadays has slowed down on the recruitment of teachers and therefore, the only viable solution is to bring on board many new members in other fields to fill that gap. “As a board, we have been supporting marketing initiatives by the Sacco by allocating the necessary budget so that we can recruit more members and ultimately build a strong Mentor Sacco brand,” Mr. Muriuki observes.
In respect to expansion, it is through the guidance of the board that the Sacco has opened branches in Kiambu (specifically Thika town) and Nairobi counties.
Currently, it is planning to open a branch in Kajiado County where some of its members reside.
The goal of the Sacco’s expansion plan is to recruit more members throughout the country. “As a board, we are very happy because this strategy is yielding dividends, our Nairobi branch for instance has already broken even after being in operation for only three years and it has become very popular with members of the business community,” says the chairman.
The ability of the board to offer effective leadership to Mentor Sacco has over the years won the confidence of its members. “Last year, we invited our members for a special Annual General Meeting (AGM) so as to boost our share capital, and within three months, we managed to raise Kshs.50 million from them,” recalls Mr. Muriuki.
Mr. Muriuki attributes the high degree of loyalty to the fact that members receive exemplary service from the Sacco and good returns on their investment every year (in form of dividends). “In essence, members are the owners of the Sacco and they are therefore very keen to see it grow into a highly profitable and sustainable organization,” he concludes.