By Providence Obuh

THE Securities and Exchange Commission, SEC approved the suspension of Rule 42 (5)(e) of the Consolidated Rules and Regulations of the Commission for 90 days, effective February 25, 2015. The suspended rule provides: “Membership of an Audit Committee shall be for a term of three (3) years, subject to good performance; Provided, that such Member shall not be eligible for re-election until the expiration of three (3) years after his previous term”. In this interview with Alhaji Gbadebo Olatokunbo, shareholder activist, he said the regulators should listen more to the shareholders.

Exerpts

What is your view on this issue?

I have been a member of audit committee since inception of so many companies. If today with the experience I have acquired because shareholders association do arrange seminar and companies too do send their members of audit committee for training. If I tell the experience I have acquired today is only that I don’t have ICAN certificate and I don’t work as an accountant but some companies do put   those who have that experience by the sideline and only those with certificate and inexperienced are considered as audit committee memebers, this is too bad .

Even companies would not be happy that after they must have spent a lot of money to train members of their audit committee, the regulator then come up with a law that stops them from performing that duty. The truth is that it takes time for someone to get acclamatised even for corporates to start developing confidence on people that would keep their secret. That does not mean you will not be vocal at meetings.

You will tell them what they need to do but a company is more relaxed when they know that you are reliable no matter how sensitive the information passed to you, you will keep it as a member of the family, you keep it within the company. By the time you start changing them, those you ask to come and replace them, the company will first of all start studying them to know their competencies in doing the job, then they can say yes this people need training. But do we have budget for them this year, ok it will be next year, by the time they train them next year, they have just one or two years to spend, then you change them.

There is a saying that you don’t change a good team in between the match but there may be other factors too. There may be some people who are not performing, they are just there and the company would want them out. Companies that have skeleton in their cupboard wants knowledgeable members of audit committee. They want dummies that would be there, doing nothing. But every good company wants competent hands, people that would be communicating with them at the same level.

So if you join and you are not up to standard, they will push you off and make you measure up to their standards because they have already established a standard. The point I’m trying to make is that the Securities and Exchange Commission, SEC at times rushes to make decision without even engaging the stakeholders, they just believe they can throw away the baby with the bath water. They look at shareholders association as not being responsible and then try to set rules for them without making them part of those rules. Listen to them and let them say whatever rubbish they want to say.

That will help you (SEC) in coming to a decisive decision. carry all stakeholders along but our regulators do not do that. They just believe they know where shareholders belong, forgetting that shareholders are owners of the companies, even if they are not performing well today it is your responsibility to make them perform. In fact, it is not only SEC, almost all the regulatory authorities, even the companies, when they want to do certain things, they listen to shareholders but they still take advice of their own consultants, forgetting that the consultant is there to make money but shareholders give advise that will benefit the company.

Example, some companies came to the stock market, when they know the market is down, they come with high price, we then advise them on what to do, they will tell you is alright we will consider it but they will do otherwise. They do these things because they have a way of manipulating the price.