Safaricom Proposes Major Governance Changes Ahead of 2026 AGM
Safaricom PLC shareholders are set to vote on a series of proposed changes to the company’s governance structure during the Annual General Meeting (AGM) scheduled for July 31, 2026.
The proposed amendments to the company’s Articles of Association are aimed at updating Safaricom’s governance framework following a shareholder request from Vodafone Kenya Limited (VKL). The proposed reforms cover areas including board composition, leadership appointments, decision-making processes, dividend governance and shareholder rights.
According to the explanatory memorandum released by Safaricom’s Board of Directors, the resolutions were submitted in accordance with Section 312 of Kenya’s Companies Act and will require approval from at least 75% of votes cast to take effect. Each proposal will be presented as a separate special resolution for shareholders to consider.
The Board stated that it will present the proposed resolutions without recommending whether shareholders should approve or reject them, allowing investors to make independent decisions based on their assessment of the proposed changes.
Proposed Changes to Safaricom’s Board Structure
One of the major proposals focuses on restructuring the company’s Board of Directors.
If approved, the amendments would introduce a minimum requirement of seven directors while removing the existing maximum limit on board membership. The proposed structure would also link board representation more closely to shareholder ownership.
Under the proposed arrangement, Vodafone Kenya Limited and CST would each be entitled to appoint one director for every complete 10% of issued share capital they hold.
The change is intended to align board representation with ownership levels and create a governance model that reflects the interests of major shareholders.
Changes Proposed for CEO Appointment
The proposed amendments also introduce changes to the process of appointing Safaricom’s Chief Executive Officer.
Under the new framework, the CEO would be selected from nominees presented by Vodafone Kenya Limited, provided the company continues to hold more than 50% ownership in Safaricom.
The proposals also state that Safaricom’s Chief Financial Officer (CFO) would serve as the CEO’s alternate representative on the Board.
New Board Decision-Making Framework
Safaricom is also proposing changes aimed at improving how the Board handles disagreements and decision-making challenges.
The amendments include a mechanism for resolving prolonged board deadlocks, with unresolved matters to be determined by directors appointed by Vodafone Kenya Limited and CST.
The proposed changes would also revise quorum requirements, allowing Board meetings to proceed with a simple majority of directors present. Ordinary Board resolutions would also require approval through a simple majority vote.
Dividend Policy and Shareholder Rights
The proposed reforms include updates to Safaricom’s dividend and reserve management processes.
Directors would be required to follow the company’s approved dividend policy when recommending or paying dividends. At the same time, the Board would retain the ability to allocate funds into reserves based on the approved policy.
The amendments would also protect certain rights of the Government of Kenya, including requiring government approval for changes to Safaricom’s name and decisions involving operations outside Kenya and Ethiopia.
Potential Conflicts of Interest Addressed
The Board acknowledged that some directors may have potential conflicts because they represent Vodafone Kenya Limited or the Government of Kenya.
However, Safaricom said these interests would not prevent the resolutions from being presented to shareholders. Both Vodafone Kenya Limited and the Government of Kenya will retain the right to vote based on their respective shareholdings.
If shareholders approve the proposed amendments, Safaricom will file the updated Articles of Association with the Registrar of Companies within 14 days, officially adopting the new governance structure.
The proposed reforms represent a significant step in shaping Safaricom’s future governance model as the company continues expanding its telecommunications and digital services operations.
Frequently Asked Questions (FAQs)
1. When will Safaricom shareholders vote on the proposed changes?
Safaricom shareholders will consider the proposed governance amendments during the company’s Annual General Meeting scheduled for July 31, 2026.
2. What are Safaricom’s proposed governance changes about?
The proposals focus on board composition, CEO appointment procedures, decision-making processes, dividend governance and shareholder rights.
3. What approval is required for the amendments to pass?
Each proposed amendment requires approval by at least 75% of votes cast at the AGM.
4. Why is Safaricom changing its Articles of Association?
The changes are intended to update the company’s governance framework following a request from Vodafone Kenya Limited and to align governance structures with shareholder interests.
5. Will the CEO appointment process change?
Yes. Under the proposed amendments, the CEO would be selected from nominees provided by Vodafone Kenya Limited if the shareholder maintains more than 50% ownership.
6. How will the proposed changes affect Safaricom shareholders?
The changes could influence how board representation, decision-making and leadership appointments are managed within the company.
7. What happens if shareholders approve the amendments?
Safaricom will submit the amended Articles of Association to the Registrar of Companies within 14 days, after which the new governance framework will take effect.
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