The growing global campaigns for good governance are finally generating some success in emerging markets as businesses and governments continue to establish structures that promote transparency and compliance with best practice. In this interview, Uade Ahimie, a seasoned Governance and Risk Compliance practitioner discusses these issues as captured in his new book titled: CRAPI-FART – Perspective for an emerging market

Uade Ahimie,

This is a very interesting question because each time people ask me the title of my book and I tell them CRAPI-FART, several of them are taken aback. Well it started when we were trying to realign the Corporate Governance Risk and Compliance system at Sahara Group, where I led the operations of the governance and risk department.

Once the realignment was done, the challenge of embedding that culture was the next hurdle to cross. My colleague and Mentee (Elizabeth Onuoha) and I researched the link between governance and wealth creation as well as optimization. We discovered that organisations that had the perfect link were able to clearly articulate the objectives of their organization with respect to the following areas – Corporate Law, Risk Management, Accounting and Finance, Project and Governance Strategy and Internal Control – (CRAPI).

The research showed that for these organizations, the ability to create synergy from the individual operations of these various aspects of business management ensured that these organization were able to build these synergies into wealth creation opportunities. For example, the ability for all the CRAPI attributes to come together in putting together a detailed transaction agreement by working together made it easier for every department to assist their clients with respect to that transaction even if it does not relate to their core area of specialization.

Our research also revealed the fact that where these aspects of the business worked as silo operational parts of the business of the organization, the more likely that issues relating to unsavory business dealing and/or practices could arise and there would be no one to take responsibility. This invariably brought about unethical practices and reputational crisis.

The reverse was the case with businesses that rather than have various units working in silos, ensured that there was synergy amongst all. This led to improved business practices and such organizations were seen by their stakeholders as institutions that carry out their operations fairly, were accountable for their business actions, took responsibility for any action and/or inaction and showed utmost transparency in their operational activities. This is how we came about the acronym FART, which represents Fairness, Accountability, Responsibility and Transparency. Hence the title of the book – CRAPI-FART

There is a growing push for Corporate Governance in emerging markets. What do you think is driving this?

Given the need for many businesses to deepen their earning capacity due to the market saturation across the developed world, organizations are seeking to invest in emerging markets in order to boost and diversify their earning capacities. Also, with the attendant demand for experienced professionals and the difficulties encountered in cross boarder movement of such professionals, emerging markets are becoming the new haven for sourcing suitably qualified governance and risk professionals.

Consequently, rather than contending with expatriate challenges, organizations are beginning to seek partnership in emerging markets that would deliver higher returns and at the same help to bolster capacity building as a way of giving back in a sustainable manner to the overall development of human capital in emerging markets.

This combination of seeking new businesses with the possibilities of higher returns and the deployment of the needed talent are some of the major reason why there is the growing push for Corporate Governance in emerging markets. This is because there is a high perception level of corruption in emerging markets and only organizations who have and are exhibiting high level systems and structures of good governance will provide the greatest partnership opportunities for these organizations.

Like I said in my book and as many of will agree, “Perception is the reality in the eyes of all stakeholders” and this is in line with Mckinsey’s statement that “investors will pay a premium for the stock of well-governed companies”.

What are the key hurdles to embracing a good governance structure in organisations?

To better understand the key hurdles to embracing a good governance structure, it is important to understand what Corporate Governance means in context of its definition. “Corporate Governance – is the system of rules, practices and processes by which a company is directed and controlled”. Corporate governance essentially involves balancing the interests of a company’s many stakeholders, such as shareholders, management, customers, suppliers, financiers, government and the community.

However, when a lot of people speak about Corporate Governance today, what we hear mostly is in relation to having a dynamic Board of Director with its major responsibilities being to supervise, guide advise and provide oversight control on the activities of the organization. When you consider the fact that many of these boards are scheduled to meet at least four times in a year and are not part of the day to day management of the organization, then the question arises as to how they can ensure the creation and sustenance of a good governance structure.

Looking at the definition provided above, it clearly highlights that organizations are faced with several interest groups all vying to gain a significant share of attention for the organization activities as regards their expectations, there creating several hurdles which include but not limited to areas such as – profitability as against wealth creation, shareholders returns maximization as against stakeholder sustainability and the encounters between all those competing for a share of the organizations funds towards meeting their own needs and objectives (financiers, governments, employees, suppliers, customers etc.)

Because of these hurdles, many organizations are faced with the dilemma of who should have the highest ranking for the funds generated and consumed by the organization, which sometimes leads to organization going back to the basics of why the organization was set up which is to maximize the profits and/or returns of their shareholders.

How would you describe the trend of good governance in the private sector in emerging markets?

The trend is one that is on the upward swing. As more emerging market organizations seek to become global brands, financing from across continents either as debt and/or equity, they have realized the need for good governance in their approaches to doing business. With the level of technology and other innovations in the business environments, there is little or no place to hide and emerging market organizations that are not embracing good governance and having challenges with business expansions into new markets and inability to variety of financing for their business.

A good example of a business helping to push this trend in the upward direction is Sahara Group. Their embracing good governance, risk and compliance initiatives have brought them huge partnership opportunities with international organizations such as the UN Sustainable Development Goals and the WEF’s Partnering Against Corruption Initiative (PACI), where they are amongst the top two African businesses propagating the narrative for clean business through the right governance structures through various programs with these bodies.

You mentioned the role of PACI in your book. Does the organsiation have what it takes to design corruption out of the public and private sectors?

Certainly, PACI has the right framework to help countries and businesses design corruption out of the system, both public and private sectors.

However, I believe that their approach to working with countries will need to change towards understanding the cultural context of how countries approach their policy development and how they can bring both the public and privates sector players to the same table through small slices rather than trying to get the whole cake at go.

By this I mean that they can start working with local private organizations with specific government parastatal towards show casing how they can help design corruption out of their systems thereby creating a prototype that can now be applied across board because of its success.

You spent quite some time pioneering corporate governance mechanism at Sahara Group. Can you share your experience with us?

It was a wonderful experience that commenced after I had spent over 10 years of working with several departments and affiliates at Sahara Group.

After I was given the mandate to spearhead risk management, compliance and governance structures at Sahara, I led several due diligence exercises by several organizations such as the WEF’s PACI, UN Sustainable Development Goals Funds and major financial institutions.

The experience of having to travel across various countries, regions and continents to share and embed good governance structures within the Group paved the way for the establishment of well thought out structures. One would also not forget the ultimate satisfaction that attended the achievement of a well-integrated governance system that is robust enough to support the continuing growth and expansion of Sahara. The outcome is of course my book which I believe will contribute immensely to the growth of the subject in emerging markets.

You once spoke at an international governance meeting in Washington DC. Can you share that experience?

It was at the PACI Vanguard meeting which was held in Washington DC, USA in May 2016. This was a wonderful experience because it was at this meeting that we put together a presentation on the tipping point needed to create a new order for ensuring good governance across all sectors of the Nigerian economy.

It was at that session that the WEF’s PACI community adopted at the end of the session that they will work with the Nigerian Public and Private sectors towards designing corruption out of our systems. This was because we were all enjoying the wind of change that had just swept across the country a year earlier.

However, like I said earlier with respect to an earlier question, the PACI community approach was more tailored towards a national approach to carryout all the redesigning at once through the central authority rather than work through slices in having small focus areas and using them as test to the putting together a more robust and comprehensive design that could then be used across board upon successful implementation.

Technology is widely viewed as one of the most effective tools in promoting and achieving good governance. How can this be deployed in emerging markets where technology remains a huge challenge?

I am a huge fan of technology as a tool for enhancing productivity and as such should always be an effective tool in promoting and achieving good governance. But like with every other technology tool, the first question to ask ourselves will be “what do I want to use this technology to achieve?”.

So, to deploy technology in the drive for more efficient and effective governance systems, organizations should ensure first and foremost that they create that CRAPI atmosphere where individuals see their personal and departmental objectives as one that aligns into the overall organizational objectives and how their interrelated activities can be aligned with their individual and performance objectives to clear show how their operational synergy creates a FART atmosphere.

Once this can be achieved, then deploying technology to drive good governance will be a huge success. This is because when developing the scope and expectations for technology implementation, use, management and monitoring, then you can create those interrelated activities that would be central to all teams and provide them the ability to achieve their individual and departmental objectives as a sub set of the overall organization objectives, thereby creating the right mix of data and information necessary for the Board to provide supervision, advisory and oversight functions in managing their good governance objectives and expectations.

We have seen breaches leading to data compromise in organisations like Facebook. What governance structures can organisations put in place to ensure data privacy

Breaches like we know are exceptions to the norm. With regards to the Facebook issue, I think they could have done better when they realized these breaches and identified the parties to the breaches, they could have FARTed.

They could have as part of their transparency communication strategy brought it to the knowledge of the public and provide the comments on the action they had taken by getting all the parties to the breaches to destroy all such data. By so doing, they would have been able to get the trust of their users and the public and subsequently will have be provided the free services of monitoring by other to ensure that all the parties to breaches had done as agreed.

Towards ensuring data privacy, organizations must asides their data and communication management policies, processes and procedures, build a system of operational governance that educates their operational employees on the need for FART, so that employees, management and Board members can readily address the challenges observed by understanding the inherent risk issues as it relates to their CRAPI approach thereby leading to improved policy, processes and procedural requirements on a timely and up to date basis.

What are the issues you hope your book will address?

I believe my book will address several issues not just pertaining to corporate governance, but also how organizations can manage other risk management and compliance challenges.

The book also provides guides to how business can move from been perceived as bad businesses whose major objectives is profit maximization without recourse to sustainability to becoming good businesses with the main objective of wealth creation and maximization across all its stakeholders’ groups

The book also provides insights into some of the world’s major companies that had their reputation tainted and how they rebuilt trust and integrity amongst their stakeholders.

On a final note how can people access to your book?

You can get a copy of the book through the following platforms. The book is available on Amazon, and available on Kindle and you can order your copies locally through acctslabs@gmail.com