Ethics holds key to honest trade at NSE, says don
KCA University vice chancellor Prof Daniel Oruoch addresses participants during the Pan African Economic Crisis conference at the Safari Park Hotel yesterday. Photo/LIZ MUTHONI
A government attempt to reform the capital markets may not succeed unless stockbrokers and fund managers adhere to ethical behaviour, a university don has said.
Treasury and the regulator, Capital Markets Authority, are currently working to improve the market confidence by laying out new rules and regulations to govern operations of players in the market.
Speaking to journalists on the sidelines of the four-day Pan African global financial crisis conference at Safari Park Hotel in Nairobi, KCA University vice-chancellor Daniel Oruoch on Tuesday said adoption of ethical professional practice carries more weight than the rules calling for publishing of financial results.
“If we don’t have honesty among capital markets players, we will destroy this economy,” said Prof Oruoch.
KCA University is owned by the Institute of Certified Public Accountants (ICPAK) an oversight body for the accountants and auditors in Kenya.
Easy to manipulate
Most stockbrokers and fund managers published their half-year financial statements to beat CMA’s August 31 deadline.
Introduced in June this year, the new rules aim at reinforcing corporate governance and transparency in capital markets.
But the professor noted that these were easy to manipulate in the absence of an ethical foundation.
“Because most people look at profit and loss statements, these stock market players can distort the figures,” he warned.
A major unethical behaviour cited against stockbrokers is trading with investors’ shares without their approval.
Prof Oruoch said that the university has incorporated ethics as a compulsory module in its professional, academic and skills based training workshops.
“We are reinforcing the message that with generally high literacy rates in the world today, and good consumer awareness, there is no alternative to ethical business,” he added.
Prof Oruoch expressed displeasure at the growing number of awards, which he said, selects winners based on how well they support organisers instead of their qualities.
“Some of these awards have their own problems; some are not worth the paper they are written on,” he said.
