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Low Corporate Governance for Controlled Companies Part II

[vc_row][vc_column width=”2/3″][vc_column_text]Last week I demonstrated the interesting phenomenon of stock market investors who were willing to buy shares, and, in some cases, at a high price to earnings ratio, of companies that had openly stated that they were not interested in having independent directors, having a committee to nominate directors or a committee to review compensation terms for management. One more thing, these companies had little to no shareholder rights. Amongst the egregious governance dodgers are the little known Google (or rather, Alphabet, its parent), Berkshire Hathaway and Facebook.

ISS Governance, an independent corporate governance rating agency, gives NYSE and NASDAQ traded companies a quality governance score based on four pillars: audit and risk oversight, board structure, shareholder rights and Compensation. On a graduating scale of 1 to 10 with the latter being the lowest score and therefore demonstrating higher governance risk, Facebook’s governance score is a resounding 10! It gets a good score of 2 for audit but everything else slides into governance oblivion when board structure rated a 10, shareholder rights rated a 9 and compensation rated a 10.

How do these companies do this? Their capital structure typically has two classes of shares: Class A and Class B. So the owners of a private company who wish to go public to raise present or future capital, or help establish price discovery for the value of their shares, can still maintain tight control over decisions, while diluting their ownership using a dual class share structure. In a case like Facebook, Mark Zuckerberg owns only 18% of the common stock but has over of the 50% voting power, largely by structuring the class B shares that he owns to have ten times more voting power than the regular class A shares. According to a Forbes magazine May 2012 article titled “ Facebook Ownership Structure Should Scare Investors More Than Botched IPO”, these kinds of structures are fairly commonplace in Silicon Valley with the likes of Google, LinkedIn and Zynga. It is also noteworthy that other big brand names like Nike, Ralph Lauren and Estee Lauder have similar structures.
According to Investopedia, the common practice is to assign more voting rights to one class of shares than the other to give key company insiders greater control over the board and corporate actions. These super voting share structures are also good defenses against hostile takeovers where a party can purchase a significant quantity of shares on the open market as to demand a seat at the board table.

Controlled companies are able to do this because NYSE and NASDAQ rules permit these structures for as long as there is full disclosure at the Initial Public Offering stage, and further ongoing filing disclosures. These disclosures should state exactly what corporate governance standards the company is failing to comply with. Thus the American stock investor has to be savvy enough to research the share structures of the companies they wish to purchase before rocking up at the Annual General Meeting and making a fool of themselves demanding to see compensation policies for senior management and all that independent director nonsense that good corporate governance dictates.
But why should the ordinary Kenyan business owner care about all of this? Were such structures permissible on this side of the pond, then it’s fairly safe to assume that we would see more family owned businesses view the Nairobi Stock Exchange as a viable option for capital raising and price discovery without the requisite nuisance value that external shareholders are viewed to bring. A good example would be the supermarket chains such as Nakumatt, Tuskys and Naivas. Or the big local manufacturers like Bidco and Menengai Oil. The flip side of the argument is that without good corporate governance, the current cash flow issues clearly facing Nakumatt’s management would severely infect investor perceptions of other family owned businesses with opaque board structures and have a knock on effect on their market valuation. Controlled company structures require tightly run management practices that stand the test of economic vagaries. With only about 6% of American companies having these kinds of structures it demonstrates that it takes a special kind of owner to convince external shareholders to just forget about governance and put your money where our mouth is!
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Twitter @carolmusyoka[/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]

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Low Corporate Governance for Controlled Companies

Western Refining is an American company that operates as an independent crude oil refiner and marketer of refined products. The New York Stock Exchange (NYSE) traded company commands a price/earning ratio of 33.3, a dividend yield of 4.23% and a market capitalization of almost US$4 billion. In November last year its share price rose by 28% on the back of news that it was being acquired by another company Tesoro, its attractiveness being an efficiently run set of refining and distribution assets that were well distributed between wholesale and retail segments. But here is the interesting bit: Western Refining is a controlled company.

The NYSE defines a controlled company as a company of which more than 50% of the voting power for the election of its directors is held by a single person, entity or group and has rules for controlled companies.
So in one of their regulatory filings, this is what Western Refinery disclosed:
“Under these (NYSE) rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements of the NYSE, including:

• the requirement that a majority of our board of directors consist of independent directors;
• the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors
• the requirement that we have a compensation committee that is composed entirely of independent directors

We presently do not have a majority of independent directors on our board and are relying on the exemptions from the NYSE corporate governance requirements set forth in the first bullet point above. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

Mr. Paul Foster [and others] own approximately 55% of our common stock. As a result, Mr. Foster and the other members of this group will be able to control the election of our directors, determine our corporate and management policies and determine, without the consent of our other stockholders, the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales, and other significant corporate transactions. ….The interests of Mr. Foster and the other members of this group may not coincide with the interests of other holders of our common stock.”

As of the time of writing this, Western Refining’s share was trading at $35.94 with an annual average daily volume of shares traded slightly above 1 million. The point is that there is a certain investor who cares less about how management is being compensated or monitored by an independent board and more about what their return on investment is, via capital gain on the share or dividend yields. I know you’re probably thinking who the black Jack is Western Refining anyway? It’s a random company I picked because it plays by the same rules as Warren Buffet’s Berkshire Hathaway, Facebook and Google. All these companies, and many more, are controlled companies trading on the NYSE. ISS Governance, an independent corporate governance rating agency, gives NYSE and NASDAQ traded companies a quality governance score based on four pillars: audit and risk oversight, board structure, shareholder rights and Compensation. On a graduating scale of 1 to 10 with the latter being the lowest score and evidence of higher corporate governance risk, Western Refining fares pretty well as it gets an overall score of 3, and pillar scores of 2 for audit, 7 for board structure, 2 for shareholder rights and 5 for compensation. Meanwhile, the Sage of Omaha Mr. Warren Buffet’s Berkshire Hathaway has an overall governance score of 8, with pillar scores of 1 for audit, 9 for board, 9 for shareholder rights and 4 for compensation. Alphabet, which is Google’s parent company has an overall governance score of 10, yes you read that right, 10 which is the lowest score, with pillar scores of 2 for audit, 10 for board, 10 for shareholder rights and 10 for compensation! Next week I’ll delve deeper into why this information should interest the ordinary Kenyan business.

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Disruptive Forces Needed In Banking

[vc_row][vc_column width=”2/3″][vc_column_text]Mark Zuckerberg came, saw and conquered. Kenyan social, print and television media was alight with highlights of his visit and for good reason. Our hotbed of innovation is presumably a key driver for choosing the country in his Africa tour. And given the rate at which banks are submitting themselves to the interest rate capping law, financial innovation should now be a logical outcome of the compressed margins and resultant lower profitability within the banking industry.

But let’s park that aside as this was all about Mark and his globally transforming social media platform that has now become a rapidly growing business tool. I first heard about the disruptive use of Facebook as a credit scoring mechanism at a G20 financial innovation conference in Turkey last year. A panelist from the American online lender Kabbage Inc. informed participants about how their credit lending algorithm went beyond the traditional, historical and fairly outdated banking industry credit assessment mechanisms. They used a borrower’s online persona to determine ability to repay using a variety of parameters and one of those parameters was the borrower’s activity on Facebook.

In a Forbes Magazine article titled “The Six Minute Loan: How Kabbage is upending small business lending” the genesis of the growth of Kabbage is well articulated. “The seeds of Kabbage, founded in 2008 and based in Atlanta, were sown by Rob Frohwein, an intellectual property lawyer. Now CEO, Frowhein saw how much data was becoming accessible via the cloud and that companies like eBay and PayPal were providing application programming interfaces that a lender could use to get real-time access to a business’ customer transaction data. Kabbage, Frohwein says, put the two concepts together. One reason Kabbage has been able to attract capital is its loan default rate. Even though it can assess applicants in minutes and never demands a personal guarantee, Kabbage says its loans are as likely to be repaid as those of traditional banks, which routinely take weeks to make a decision.”

Now this is a very interesting concept. While interest rates are coming down rapidly within the banking sector, loan approvals for unsecured personal and SME loans will not necessarily increase in tandem as the risk profiles of customers is not in any way changing. Yet these borrowers need a source of financing and Kenyans are about to wake up to the often beaten, but much ignored, drum that pounds the message: borrowers are as indifferent to rates as they are as desperate to get a loan approval. Back to the Kabbage story from Forbes, “Frowhein says Kabbage targets established businesses rather than startups, with its automated model assessing three factors: capacity to repay, character and the consistency or stability of the business. ‘We believe we get to know a small business better by being connected to their data sources electronically than any loan officer can do by sitting down at a desk with the borrower,’ says Frohwein. He says Kabbage incorporates nontraditional metrics such as a company’s Twitter or Facebook followers, as well as the online reviews of its customer’s posts as a way to round out an applicant’s story. ‘You won’t get a loan because you have 7,000 likes on your Facebook page,’ he says. ‘But we might increase the cash available to you if you have an active social media following because it establishes the credibility of your business with its customers.”

Now for all the banter I saw on social media about the number of countries that have interest caps, with some pundits including the United States in that category, this will come as a surprise. The average annual percentage rates (APR) of Kabbage’s loans to its American small business customers are 40%! The same article quotes Frowhein as saying “the rates range form 1.5% to about 20% for the first two months of the loan, depending on a variety of risk factors and how long the cash is kept, and then drop to 1% for each subsequent month.”

Yes. I see you. I see the wide saucers that your eyes have become. Let me provide you with the definition of APR: An annual percentage rate is the annual rate charged for borrowing and is expressed as a percentage that represents the actual yearly cost of funds over the term of the loan. This includes any fees or additional costs associated with the transaction. So your Kabbage borrower is someone who has been unable to get a loan approval from a bank for whatever reason (more often than not a poor credit rating score, or worse, no credit rating score as the borrower has not built enough of a credit history) and will take what’s given since it is approved in six minutes, rather than weeks and does not require collateral such as a log book or title deed. In case you’re wondering whether Kabbage is a two-bit flash-in-the-pan player, it’s not. Since it launched in 2009 the company has lent more than $750 million (Kshs 75 billion) to small businesses and expected to lend $1 billion (Kshs 100 billion) in 2015 with revenue exceeding $100million (Kshs 10 billion).

The winner of this interest rate capping law is not the individual or SME borrower. Their risk profiles are such that they will be unattractive to lend unless a secure mechanism for quickly collateralizing and liquidating fixed and movable assets is put in place in Kenya. Such a system has to be backstopped by an efficient and incorruptible judiciary that will allow realization of securities to occur thereby reducing the drag currently endured by banks in liquidating bad debt. The true winner will be the fintechs that can very quickly dis-intermediate the banking system by providing credit to individuals and SMEs a) without collateral and b) within minutes. Timing is key in business, as it enables quicker turnover leading to conversion of goods into cash that is used to pay off the high-interest loan and put debt free funds into the pocket of the borrower.

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Twitter: @carolmusyoka[/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]

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Banks are the new slaves of technology

[vc_row][vc_column width=”2/3″][vc_column_text]$300 billion. Let me translate that into Kenya Shillings. Roughly, Kshs 30 trillion. Now let me put that into perspective. The Kenyan Government budget for the current financial year 2015/2016 is Kshs 2.1 trillion. So about 15 times that number. What is this $300 billion I’m going on and on about? That is the size of penalties that had been levied since 2010 to global financial institutions by June 2015 as reported by the Financial Times. These included fines, settlements and provisions for various levels of misconduct some of which is related to the global financial crisis of 2008. The culprits read like a who’s who on the red carpet to punitive pain: Bank of America, JP Morgan Chase, Standard Chartered, Citigroup, Barclays, Deutsche Bank, HSBC, BNP Paribas and on and on.

And the natural reaction for all these institutions is to tighten controls, seal loopholes, grow the compliance function and generally create enough bottlenecks internally to ensure regulatory compliance. The winners: audit and compliance teams who rule the roost over every single non-compliant new customer onboarding and new product approval process. The losers: the concept of the big, global monstrosity bank that straddles continents like a financial ash cloud. Compliance is expensive. Non-compliance is astronomically expensive. So it was with great interest that I listened to a talk by a renowned futurist called Neil Jacobson last week.

Neil paints a bleak future for the traditional global bank citing six reasons why there is a perfect storm in the global financial industry. First off, there is trust crisis. Even with pedigree board members, highly experienced (and paid) executives in management as well as world class operating systems and processes, many banks clearly can’t get the back end right. The chase for profit trumped controls many times. Secondly he cites the security and regulatory firestorm. I don’t need to harp on it as the number is clear: $300 billion and counting. Regulators are licking their chomps at the highly lucrative knuckle rapping that they have been undertaking. If nothing else, it’s a back alley way to raising more taxes. Thirdly is a technology tsunami. You don’t have to throw a stone very far today before it lands on a code writer, developing one app or the other as there are so many financial technology companies (fintechs) willing to throw money to anyone who comes up with the best app to help provide access to credit or money transfer. The classic thing is this: with the Internet, it doesn’t matter if that developer is sitting in a bedsitter in Kayole or a one bedroom flat in Silicon Valley. The one with the best solution wins. Visit iHub on Ngong road and see what I’m talking about. Facebook, as a matter of fact, is already running app competitions in Kenya. The demonetization of transactions such as matatu fare, paying for food at a restaurant, receiving payment for supplying milk or vegetables is very quickly democratizing the role of money movement beyond the traditional banking space. And banks are too clunky and too heavily regulated to make the quick changes that fintechs are able to exploit. Which brings me to the fourth reason for the perfect storm: an explosion of new, different and rude competitors who are not members of the “old boys club” (which requires academic and professional pedigree) and are alternative thinkers. At this point Neil introduced the audience to the acronym GAFA -which acronym derisively originates from French media – that stands for Google, Apple, Facebook and Amazon. None of which, with the exception of Apple, existed twenty five years ago and together virtually own the technology space. Three of these powerhouses got together in November 2015 under the auspices of “Financial Innovation Now”. Together with Intuit and PayPal, the other three giants Amazon, Apple and Google put together the coalition to act as a lobby that would help policy makers in Washington D.C. to understand the role of financial innovation in creating a modern financial system that is more secure, accessible and affordable. This is where it gets interesting as they twist the knife into the back of traditional banks, “Financial Innovation Now wants policymakers to understand how new technologies can help solve today’s policy challenges.” In other words, we need lawmakers not to be bottlenecks as we help sort out critical voter issues like access to financial tools and services as well as helping voters to save money and lower costs. Win-win for everyone, except the banks.

Once lawmakers start to understand the benefits of low cost, secure financial solutions that do not require deposit taking mechanisms, it is likely that they will apply a much lower prism of regulatory restrictions that are currently straitjacketing the financial industry. You don’t have to go far: look at the Mpesa functionality and the strict segregation of Mpesa funds from Safaricom deposits which was the regulatory compromise for accepting the service in the first place. Neil’s fifth reason for the financial perfect storm is that pressure from customers, staff, regulators and all stakeholders is growing. And his final reason was the ultimate challenge for all businesses beyond the financial industry: Customers are changing. A study presented at Europe’s Finovate 2015 showed that 30% of today’s workforce is made up of millenials, 85% of who want banking to be disrupted. Have you seen those young people whose eyes are constantly glued to their devices and would rather starve than not have data bundles? The solution is hand held and your solution had better dovetail into their solution.

Closer home, the impact may be less harsh. For now. But our homegrown financial institutions are morphing into regional powerhouses and it won’t be long before a few float to the top of the pan-African heap. The successful ones will be the ones that grow their customer base on the back of technological innovation rather than bricks and mortar. To quote Larry Page, one of the founders of Google: Companies fail because they miss the future.

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Twitter: @carolmusyoka[/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]

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Give your entire wealth to strangers

[vc_row][vc_column width=”2/3″][vc_column_text]I was in a recent discussion with someone who has just joined a not for profit organization whose area of focus is sexual reproductive health in Africa. Having sat on the boards of a few not for profit organizations, my curiosity was piqued regarding the source of funding for the organization’s programmes across various African countries. Said curiosity morphed into a question that yielded quite an interesting response. The organization is funded largely by American donors – the usual corporate suspects like Bill and Melinda Gates Foundation, as well as very many private individual donors. And that is what caught my attention: private individual donors who are inspired to gift while alive or bequeath post humously. What would inspire a right minded, manifestly talented individual who has created and multiplied wealth to just give it to absolute strangers, when the better option would be to keep it in the bank and let children and relatives salivate over the prospect of their inevitable death?

So I had to do a little research over this phenomenon, as this equatorial part of the world has yet to see widespread, unabashed and selfless giving at a time when amassing personal wealth has become a specialized race in the Kenyan corruption Olympics. I pulled up a Barron’s List of top 25 givers in 2013. Hang on to your hats, this was largely an American list of givers and the recipients were largely American institutions. Top of that list was – don’t hold your breath – Facebook founder Mark Zuckerberg and his wife Priscilla Chan who gave out $999.2 Million (in simple words, a billion dollars or Kshs 102 billion) of Facebook stock to charity. But not just any charity, they chose to give it to Silicon Valley Community Foundation which is a philanthropic clearinghouse, collecting charitable contributions and distributing them to hospices, educational groups, museums and clinics. I guess Mark and Priscilla figured: let’s give this money to a credible organization that knows how to better place these funds than we can. (Food for thought to be touched on later) Also on the top 25 list that year was Michael Bloomberg, the founder of Bloomberg, former New York City Mayor and 7th wealthiest man in the United States, who gave $452 million ( Kshs 46 billion) largely to his former alma mater, John Hopkins University, to fund scholarships as well as research. Actually a number of givers on that list gave money to their former universities; well run institutions that have demonstrated a great ability to efficiently channel donor funds into growing an established body of academic research and produce the nation’s greatest talented workforce.

Notably, Warren Buffett, chairman, CEO and largest shareholder of Berskshire Hathaway, holds the individual giving record. In 2015, Buffett donated $2.84 billion (Kshs 289.7 billion) of Berkshire Hathaway shares to the Bill and Melinda Gates Foundation as well as four family charities, three of which are overseen by his children. The purpose of donating stock is for the recipients to sell the same as appropriate and realize the cash value of the gift. The 2015 donation was his tenth annual one, bringing his total charitable donations to a staggering $25.5 billion (Kshs 2.6 trillion or 500 billion more than Kenya’s Kshs 2.1 trillion 2015/16 budget) according to Forbes Magazine. In case you missed it, Buffett is the fourth wealthiest man in the world and has pledged to bequeath 99% of his $64.5 billion net worth (or an eye-popping Kshs 6.58 trillion) to charity when he dies.

You don’t have to go far in Kenya to find battle lines drawn between brothers and sisters, mothers and children, uncles, aunts versus nephews and nieces all picking over the remains of an enterprising founder’s hard work like vultures over carrion. Something that these entrepreneurs know is guaranteed to happen, as there is always untidiness in the intestate death of a patriarch with multiple wives, multiple children and multiple beneficiaries of his largesse. It cannot be that one should work extremely hard over one’s lifetime: creating businesses, employing workers, enriching a supply chain and contributing to the taxman all for it to go belly up in lawyer’s fees and stomach churning blood feuds because we still subscribe to centuries old cultural succession practices that didn’t anticipate the kind of stupendous wealth that is at stake today. I’m not just talking about the ubiquitous Kenyan business magnate. I’m talking about you and I who have a few assets that may seem innocuous today, but which can be sold upon our death to generate a sum of money that would buy desks in a school, or a few hospital beds in a far flung medical institution, or pay for 50 pupils to get secondary education. Because our children have received the best gift from us, a good education which should put them in good stead to build wealth of their own instead of assuming the widespread sense of inheritance entitlement that I often observe from the children of the rich.
Now back to my earlier point about food for thought following the Zuckerberg contribution to the philanthropic clearinghouse. While our public universities and hospitals are crying for help, our record of funds mismanagement makes them poor candidates for direct gifting.

We lack an institution through which we can channel wealth for distribution to various worthy causes. An institution that is well-run, free from political interference, has perpetual succession and extremely strong governance mechanisms to ensure funds are appropriately and transparently used. Such an institution may provide an easy alternative to Kenyans who wish to leave their assets outside of family, as well as provide a mechanism to maneuver around the Kenyan laws of succession that require for dependents to be provided for, as one can gift one’s wealth while alive. Regardless of that, there are still many credible NGOs that can put our hard earned money to better use than some of our privileged children. Food for thought in 2016 and happy New Year to you!

[email protected]
Twitter: @carolmusyoka[/vc_column_text][/vc_column][vc_column width=”1/3″][/vc_column][/vc_row]

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Young Entrepreneurs That Walk The Talk

Entrepreneurship is the last refuge of the trouble making individual. ~ Natalie Clifford Barney

Ted* came to work in my team as an intern in early 2007. Back in those days, working in a financial institution such as Barclays was the alpha and omega of a professional career. He was a stroppy 22 year old, with hair that was at least 3 inches too long and shirts whose cuffs that were at least 3 inches too short of the wrist line. He was a breath of fresh air in an environment of monumental performance pressure underpinned by a staid, insipid office culture. About a month before the first anniversary of his employment, as he had successfully transitioned into a full time job, he came to talk to me about taking a few months off to tour the United States.

“What?” was my incredulous reply. “Yeah, I want to just go around the States, maybe I’ll go to Mexico as well. I just want to figure stuff out,” he said nonchalantly. “But what about your career, I mean, you’ll have this inexplicable black hole in your CV which can’t be addressed with the words ‘backpacked through the United States for the sake of it’ as a line item,” I whined. It didn’t matter. Ted left for the United States, and threw in a couple of months backpacking through Europe as well. When he got back, he decided to start up a business doing websites for companies, as he was now crystal clear that he never wanted to work for anyone again.

Last week, I spent a morning in the offices of Kevin*, a twenty six year old entrepreneur whose business it is to collect electronic data from the online community, make sense of it and then help businesses make strategic decisions by distilling the information into language that decision makers can understand. Kevin has travelled around the world in the last two years providing insights at global conferences as a leading voice on African social media tactics and tips.

For two straight hours I sat with Kevin and two of his team members, getting completely blown away by the quality of data that they are able to collate using people’s Instagram, Facebook and Twitter feeds as sources of what would look like rubbish data to the untrained eye, but is actually valuable information on the experience of products and services by Kenyan consumers. Kevin only has one permanent employee in his office. The rest of his team work on contract from wherever in Kenya that they can link up to a fast internet connection. His clients are multinationals and top tier local corporates who are now starting to understand the benefits of getting unsolicited real time customer experiences to improve on their product offerings.

In a classic serendipitous twist, Kevin’s landlord is Ted, who has now become the consummate entrepreneur. At twenty nine years old, Ted now has 26 employees providing web design, branding and social media marketing solutions to multinational and local organizations in the banking, FMCG and not for profit sectors. I walked through Ted’s offices, where young fellows with 5 inches of Afro, cuff less shirts, loud blaring music and a completely relaxed, colorful environment created extraordinary client solutions on large Mac computers. It turns out that Kevin needed space to set up his business, and Ted gave him a corner desk and unfettered access. “It’s all about how we work together, Kevin thinks differently and thinks big, as a result he has helped us on some of our work and we’ve done some projects together,” Ted told me later. In his playbook, having different people share his rented office space provides opportunity for getting different perspectives on how to do business. Paul is another twenty something entrepreneur sharing Ted’s space. “We liked his vibe and he liked ours so we gave him space as well,” Ted says of Paul. There is a refreshing openness in the way Ted operates with his sub-tenants and a strong culture of leverage from synergistic relationships within the workspace. His big break in providing customized Facebook pages for clients came through a famous Kenyan musician who had come to see his previous music industry production tenant. Ted and his team were trying out their new product and offered it to the musician who had nothing to lose. The marketing manager of a large FMCG multinational saw the page, loved it and commissioned Ted’s company to do one for them. The rest as they say is history as their highly visible work sold itself off its virtual platform.

There are many Ted’s and Kevin’s in Kenya. They have chosen to buck the trend that our education system has tried to force down our collective throats which trend says that cramming, passing exams, going to university and looking for a job is the ultimate route to Canaan. These young men, and the people that they work with are making a big difference in the way that their corporate clients are doing business and understanding a client demographic that is both fluid and fickle. They are providing a service on their own terms, not constrained by the astoundingly boring confines of office environments that stifle creativity.

For every Chicken-gate, Angloleasing-gate and Maize-gate tenderpreneur we have in Kenya, there are at least ten thousand young people who want to make an honest living doing what they are madly passionate about. They fight a system that has conditioned our society into thinking it’s all about passing a standard eight sieve into a smaller form four sieve into an even smaller university sieve that spits out graduates expecting to be absorbed into a small workforce. The chaff that remains at the top of the sieves is browbeaten into defeatism and a self-fulfilling prophecy of doom. I’m glad that Ted bucked the trend and walked out of employment despite my pathetic exhortations against his mad ideas. 26 employees are happier for it.

*Not their real names
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Twitter: @carolmusyoka