Good governance turns on three interlocking cog wheels. The Chair leads the Board. The CEO leads management. The Company Secretary keeps the Board’s processes, records and compliance in gear. What happens when one of these cogs is held in an acting capacity? Does the engine stall?

Two governance assessments Patricia Wanjama carried out recently suggest it doesn’t have to. In a listed company, an internal Acting CEO ran the business for four months before the Board appointed an external candidate. In a State Corporation, the Acting CEO performed so well that the acting term was extended. In both cases, the wheels kept turning.
That was a positive governance observation. The following were our conclusions:
💡 A policy that anticipated the vacuum. It set out who acts, for how long and on what terms.
💡 Sound Board judgement. The Board picked a fully qualified person and gave them written KPIs, defined authority and clear limits.
💡 Fair pay for the extra load. One HR policy I reviewed pays a a nominal acting allowance after 30 days.
💡 An appointee who took up the challenge and delivered, with visible Board support.

❇️ When the CEO is acting: Make the appointment by Board resolution and in writing. Attach a delegation schedule that says what the acting CEO may and may not approve, such as long-term commitments, senior hires and major contracts. For State Corporations, the power to appoint the CEO rests with the Board, and the courts have directed that acting periods run for no more than six months, followed by competitive recruitment.
❇️ When the Company Secretary is acting: The Companies Act, 2015 allows a deputy or assistant secretary to carry out the role while the office is vacant. Boards should still make sure the acting holder is a Certified Public Secretary with a practising certificate. For a public company, the Registrar must be notified within 14 days.
❇️ When the Chair is acting: The Board Charter should name a Vice-Chair or Senior Independent Director to step in.

Restoring the office to full capacity:
✔️ Start the substantive recruitment the day the acting appointment begins, and minute the timeline.
✔️ Cap acting periods. Any extension should need a Board resolution that states the reasons.
✔️ Let a qualified acting holder compete for the substantive role. If an outsider wins, plan how to keep and re-integrate the acting holder. Losing a proven performer is a hidden cost.
✔️ Disclose changes promptly to regulators, shareholders and, for listed issuers, the market.
✔️ Review the emergency succession plan at least once a year.

One caution: a long acting period quietly erodes authority. Staff, lenders and partners may start waiting for “the real CEO.” An acting appointment should be treated as a bridge to a substantive appointment.

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