Standard Group, the publisher of Kenya's second-largest newspaper, is undergoing a leadership change as the board replaces outgoing CEO Orlando Lyomu. While the company prepares to recruit a permanent CEO, an insider is expected to assume the role in an acting capacity.
Insiders at the Standard Group Centre on Mombasa Road suggest that Mr. Joe Munene, the managing director for the broadcast division, may be chosen as the acting CEO.
Munene, a long-serving employee of the company, is considered the most senior manager after the CEO. However, rumors also circulate that he is in discussions with Cape Media, the operator of TV 47 and Radio 47.
Assuming the role of acting CEO would give Munene a head start in the race for the permanent position, which is likely to attract interest from other board members.
Munene, who recently played an active role in the KTN relaunch, is well-aware of the challenging financial situation at the Standard Group, including mounting losses and salary arrears.
Under Lyomu's leadership, Standard Group experienced a period of mixed fortunes, culminating in the company's largest-ever loss of Ksh1 billion in the financial year ending December 31, 2022.
Lyomu attributes this significant loss to an increase in provisions for expected credit losses, resulting from pending government bills and the need to service debt.
The company is burdened with substantial loans, and the cost of servicing its financing rose to Ksh215 million in 2022, accounting for over 20% of its losses, compared to Ksh162.8 million in 2021.
To address the challenges facing Standard Group, the board has established a transformation committee led by a board member.
The committee aims to implement a turnaround strategy, acknowledging that it may take approximately 18 months for the company to stabilize.
Among the key areas of focus for the committee and the new CEO will be the issue of ghost workers who have been draining the company's resources.
Additionally, the loss of talented journalists to other media houses, the government, and the corporate sector over the past few years poses a significant challenge.
This talent drain has negatively affected the morale of editors and section heads. A comprehensive audit of the company's products, particularly the radio and TV stations launched in the past five years, will also be necessary to assess their profitability.
Despite the challenging circumstances, there is a glimmer of hope for Standard Group employees. They recently received 40% of their March 2023 salaries, indicating a commitment to address the salary arrears issue.