Safaricom has taken steps to ring fence its systems

Safaricom CEO Bob Collymore (right) and CFO John Tombleson during the company's announcement of its 2015 full-year financial results at Safaricom House in Nairobi on May 11, 2016. PHOTO | SALATON NJAU | NATION MEDIA GROUP

What you need to know:

  • When a company grows fast, like Safaricom has, it runs the real risk of having its operating systems lagging behind.
  • Internal self-cleansing allows organisations to emerge fresh and reinvigorated for the next phase of growth.
  • Internal audits are for internal consumption and should not be used by third parties for extortion and blackmail by dubious characters.

Every organisation, once in a while, needs to take a deep and critical look at itself.

It must delve into how it conducts its business, its relationship with its customers, suppliers, employees and all other stakeholders.

A detailed self-audit, done by a disinterested, but professional third party, should essentially allow management to take a deep breath, remove the shroud covering the company, take a peek inside and decide whether what they see is what makes a great company.

Firms that thrive for long know that a peek behind the curtains will unveil any lurking issues that might come to the fore in the future and which will affect its operations.

It is a kind of self-diagnosis that allows a company to chart a path that is not littered with avoidable risk.

And when a company grows fast, like Safaricom has, it runs the real risk of having its operating systems lagging behind. Its checks and balances sometimes remain like those of a small company while it has actually outgrown those systems. This internal self-cleansing allows organisations to emerge fresh and reinvigorated for the next phase of growth, with renewed energy, perspective and sense of purpose.

That is why I am quite disturbed by the recent debate especially on mainstream and social media about an audit done by KPMG on the internal systems of Safaricom, and which seemed to suggest that the firm has not been operating above board on some of its procurement processes.

First things first; even the best companies in the world are not perfect. If the lid was lifted on some of the globally acclaimed companies, the rot you find might have completely destroyed the innards, and all you see from the outside is a shell. We have many examples of such companies both locally and internationally.

Secondly, internal audits are, as the name suggests, for internal consumption; they should not be used by third parties for extortion and blackmail by dubious characters, which is essentially what is happening in the Safaricom case.

Firms that thrive are always looking at how they can improve their internal systems as they aim for the True North of best practice. After all, like The Economist magazine likes putting it, a firm’s reputation is “reality with a lag effect”. Strong brands means more returns, less risk. You have to consistently strengthen a company’s systems that will allow the brand to emerge from the crowd over time.

PROCEDURAL PROCESSES

As someone who has been in the corporate world for quite a long time, I believe this is what Safaricom is doing by reviewing its internal processes with a view to improving operations and service delivery. The company has posterity in mind, not just short-term profits.

It should be well appreciated that the KPMG study was commissioned by Safaricom CEO Bob Collymore. This action speaks to a self-awareness and search for improvement that is sorely lacking in many corporations, let alone one as successful as Safaricom.

It is hard for anyone with experience in corporate matters to understand what the hullaballoo is all about. This is simply a company trying to carry out a review and, if necessary, overhaul of certain systems to allow it continue thriving today and in the future.

Indeed, the hall mark of such studies is to address some of the areas that require attention by Safaricom, procedural processes that need to be tightened and administrative measures that need to be instituted to make Safaricom the company of the future and maintain its “best in class” status. What would be the value of an audit report that does not lead to some changes in the way a company operates? It would be good money down the drain.

But are we really asking the right questions here? Should a company that has on its own motion instituted such a study be vilified and subjected to public attacks on its integrity? Who has the most to benefit from publicising this report and to what end?

It will be our loss if companies are discouraged from undertaking these type of studies out of concern of them being used as tools to settle scores or worse.

We have recently seen instances where failure of corporate governance has led to collapse of some corporates that a few years ago were household names.

The writer is the Chairman of the Kenya Chambers of Commerce and Industry

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