Several Kenyan corporates must reconstitute their boardrooms following a decision by the capital markets regulator to ban nine directors from serving in listed firms while releasing fresh corporate governance rules that could rule out more executives.

The Capital Markets Authority on last week barred Martin Forster and Sobakchand Shah from serving as executive directors of listed firms.

It also disqualified Charles Njonjo, Peter Muthoka, Jeremiah Kiereini, Richard Kemoli and Andrew Hamilton from serving in public companies.

Most of the banned directors sit on more than one board in companies listed at the Nairobi Securities Exchange, meaning the firms will have to look for replacements.

CMA chairman Kung'u Gatabaki said the nine had flouted the capital markets legal and regulatory requirements in the matter of CMC Holdings Ltd (CMCH).

The announcement came as a majority of Kenya’s 44 banks were facing pressure to reconstitute their boards in response to new regulations by the Central Bank of Kenya (CBK) that require half of non-executive board seats to be held by independent directors.

CBK, in the new rules, which were to take effect last week, said it aimed at reducing the influence of principal shareholders in boardrooms as well as safeguard the interests of minority investors.

CBK defines an independent director as a board member who is not a direct or indirect representative of the principal shareholders, has not worked in the bank as an executive for the past five years and has not had any business relationships with the institution in the same period.

The latest purge is seen as a signal that the CMA is seeking to stem rising concerns of corporate governance lapses that have tainted its credibility as a regulator.

Since January, CMA has been battling a credibility crisis with boardroom wrangles at motor dealer CMC and cement maker East African Portland Cement. Mr Gatabaki said Joseph Kivai had also been barred from sitting on the CMC board.

Mr Gatabaki said CMA plans to implement rules that will require all directors of listed companies to undergo corporate governance trainings.

CMA also wants board members in listed firms to retire at 75.