Speaking in Nairobi during the launch of a new financial product at the Nairobi Securities Exchange, the President said the government will begin allowing private investors to play a direct role in the governance of state corporations where they hold shares.
Currently, the government has full control over the appointment of boards in most state-owned enterprises.
Under the new reforms, private shareholders will be allowed to nominate board members based on their level of investment. This move is intended to align decision-making with financial responsibility.
The President explained that the changes are part of a broader plan to professionalise parastatals and make them more accountable.
He noted that many state corporations have struggled due to political interference and the appointment of individuals without relevant expertise.
Kenya Reinsurance Corporation and Kenya Electricity Generating Company are among the first institutions set to benefit from the new framework.
These companies have significant private shareholding, making them suitable for the proposed governance model.
The reforms build on changes already introduced at Kenya Pipeline Corporation, which is currently undergoing partial privatisation through an initial public offer.
The government is selling a large portion of its shares to the public as part of efforts to raise capital and improve corporate governance.
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