By Charles Kumolu, Deputy Editor
President, Institute of Chartered Secretaries and Administrators of Nigeria, ICSAN, Mr. Bode Ayeku, in this interview, explains how the private and public sectors can achieve economic growth with corporate governance.
Only the private sector implements corporate governance in the country. Is it not better the public sector follows suit?
The current challenge I see in the environment is that we are clapping with one hand when we talk of corporate governance in the sense that all discussion relating to corporate governance is focusing on the private sector.
And it is not supposed to be the standard. And that is why the focus of the institute is that it should be corporate and public governance administration.
In every economy, we have both the private and the public sectors. It is only when both sectors are doing things right that the country can achieve the desired economic development.
We are looking at both sectors so that at the end of the day, we can have the desired improvement. We should be regulated by the same rules, irrespective of which sector you belong, either the private or public sector.
That is why it is interesting and important for the institute to continue to embark on this advocacy to let all stakeholders, whether in the public or private sector know that we must be part of this particular initiative by participating actively.
Active participation means that we not only know about what is good. You must practise what is good because it is when you practise what is good that you are contributing meaningfully to the development of the economy, of the nation and also the sector that we belong to.
That is why we will continue to put in place, programmes, not limited to our members but all stakeholders in such a way that we move fast, and in such a way as to align ourselves with the current global trends, that are positive.
What do you think of the public sector in terms of accountability and disclosure of public funds?
There is room for improvement. Some years ago, they started publishing allocations to states and local governments. It is a form of disclosure.
And that is why the responsibility of the led would be relevant. How many in those areas do ask their local governments – how have you spent this money? So that goes to the need for us to ask the right question.
In the past it was not like that, you won’t even know how much a state is given or a local government. Apart from that, you also communicate a project, the amount, and the location. If they say they have completed it, they also do commissioning, inauguration.
This enables us to ask relevant questions on this project, has it been done, or this thing commissioned had not been completed? I think that is an area we need to also assist the government.
When you draw their attention to certain things, you will observe that they make amendments. So as much as possible, they have started doing something in terms of disclosure, and accountability.
Why is the public sector yet to adopt the corporate governance code?
If you look at when we started the Nigerian Code of Corporate Governance in 2018, the idea then was to have a code that applied to the private sector and the public sector.
There were public hearings and I participated in all the public hearings between 2015 and 2018. We were unanimous that there must be a code for corporate governance.
However, the major challenge then was that most of these public institutions were established by Acts of parliament and those Acts of Parliament had given them clear guidelines as to how they should do things, who should be in charge of each organisation.
And for them now to key into this code of governance proposed for the public sector, it would require that they should amend some of the provisions in their enabling Acts.
The challenge then was whether that would be possible so soon? Because some of the agencies also attended the public hearing to say these are the provisions we have in our enabling Act.
These are the reporting lines, these are the governance structures in those legislations, and you know a code cannot override a law. The law is supreme as far as the organisation is concerned.
Are there efforts to get the public sector to adopt the code?
The Financial Reporting Council had a discussion with government and I think there was a compromise there to say -can we do it in stages? Let us start with the private sector.
And that was what led to the decision to draw the corporate governance structure. It was not based on resistance of the public sector. The public sector is also conscious that there is a need for change, and that is a matter of time.
Now that the Financial Reporting Council of Nigeria is through with the code of corporate governance for those in the private sector, the next assignment is to start from where it stopped.
Hopefully, they would be able to amend the provisions that could create bottleneck along the line and hope they key into it. Best practices should be ideal for a country, not for a sector alone.
So far, your institute has concentrated more on the private sector. Why?
Our focus is not limited to the private sector. We are also interested in the public sector to ensure that best practices are imbibed and things are done properly because we have seen in almost all the developed countries of the world, that corporate governance is not only focused on the private sector.
It is expected to comply with best practices. In every economy, we have the private sector, we have the public sector. And it is only when both sectors are doing things right that the country can achieve the desired economic development.
And that is why in Nigeria, we are encouraging the government to imbibe best practices in respect of corporate governance, so that, it can complement what the private sector is currently doing.
Over the years, as far back as 2003, we had code of corporate governance for the private sector.
It will be something of interest to the institute and the institute is willing to partner the government, in such a way that we also have a code of governance for the public sector because the private sector exists to complement what the public sector is doing.
It is better for those sectors to be regulated by the same principles, in terms of best practices, so that we can actually move very fast.
How relevant is corporate governance structure to organisations?
Corporate governance has come to stay. That is why the obligation is given to a company secretary, a chartered secretary to ensure that things are done properly and even advise the board.
The board basically appoints the company secretary, but in this case, the person now appointed is the one to advise the company and the board on issues relating to ethics, conflict of interest and corporate governance.
That shows there is a shift in the role or assignment given to the company secretary and that is why most of our sister institutes worldwide have decided to not only communicate this change to company secretaries and stakeholders, in terms of what they are expected to do but also to let them carry that name so that they know the way to that responsibility and discharge that responsibility credibly.
That is why we have countries like UK, Canada, Australia, Brazil, they have changed, and several other institutes and it is a matter of time. We are also a member of the Corporate Secretaries International, which is the global body for all chartered secretary worldwide.
If you were a company secretary 30 years ago, the role you play now as a company secretary is a minimum of times 500 of what you were doing before because things are changing.
Now, you are to initiate practices that are in line with best practices.
You must compare with other developed climes and see what they are doing and try to see whether we can have the economy or society that we deserve.
Operating in the country
We have been in existence for about 54 years in Nigeria. We have been discharging our responsibilities as stated in our enabling Act as much as possible.
We have been training students to be corporate governance practitioners, and for our members, we have been developing their capacities, by continuing education programmes that we organise from time to time in addition to other programmes aimed at developing their capacity to deliver on their assignment.
What is the institute doing to develop its members professionally?
2020 is not different in the sense that we have lined up several activities in order to ensure that we continue to equip our members and relevant stakeholders with basic information on what they need to do in order to ensure that they imbibe best practices in terms of corporate governance, and we have organisations that will be able to stand the test of time and to ensure that they are in sustainability.