What the CMA Code asks of your board on ESG

The Capital Markets Authority's Code of Corporate Governance Practices for Issuers of Securities to the Public sets out what boards of listed companies are expected to do, and it applies an apply-or-explain discipline to each principle. Sustainability sits inside that framework. The board is expected to oversee it, to report on it, and to be able to show that it did.

The Nairobi Securities Exchange ESG Disclosures Guidance Manual, in force since November 2021, adds the disclosure layer: listed companies are expected to publish ESG information annually, aligned to GRI. Between the two, a company secretary has a clear brief.

What oversight looks like in practice

Oversight is not a paragraph in the annual report. It is a set of evidenced routines.

1. A board or committee mandate that names sustainability and climate risk explicitly, with terms of reference that say how often the topic is considered.
2. Board minutes that record ESG matters discussed and decisions taken, not just presentations received.
3. A named executive owner, with sustainability objectives in their performance scorecard.
4. A link between ESG performance and remuneration, or a documented reason why there is none yet.
5. Board competence: at least one director who can challenge a climate scenario or a materiality assessment, and a record of board training.

The board pack that answers everything

The most useful thing a company secretary can build is a standing ESG section in the board pack. Two pages, every quarter, drawn from the same data each time. Material topics and any change since last quarter. Performance against the metrics that matter, with a flag on anything that moved sharply. Open critical gaps, with owners and dates. Regulatory calendar for the next ninety days. Assurance status.

That pack does three jobs at once. It is the oversight routine the CMA Code expects. It is the evidence base for the NSE disclosure. And it is what an investor or lender wants to see when they ask whether ESG is governed or merely reported.

The apply-or-explain trap

Many companies explain where they could apply. A board that has no ESG-linked remuneration and says so is complying with the Code. A board that claims ESG-linked remuneration and cannot produce the scorecard is not. Auditors and increasingly investors test the claim, not the statement.

Where governance meets the rating

Governance is a scored pillar in the AfriESG methodology alongside People and Planet, and board oversight is the largest topic within it. Companies that build the routines above tend to score well on governance without any special effort at reporting time, because the evidence already exists.

How AfriESG helps

The platform generates the board pack from approved data, with a name and a document behind every figure, tracks the readiness checklist for governance and IFRS S1 side by side, and keeps the minutes, mandates and scorecards as evidence linked to the criteria they satisfy. When the CMA or the NSE asks how the board oversees sustainability, the answer is already filed.