It’s been said that until Nigerians imbibe the culture of corporate governance in carrying out private and public assignments, every effort would amount to taking one step forward and two steps backwards; writes ELEOJO IDACHABA.
Nigeria, in the last two weeks, has been inundated with revelations concerning alleged high-level corruption involving some top government officials to the dismay of many hearers. First, in the last two weeks was how the now suspended chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Ibrahim Magu, operated the Commission without adherence to constituted authorities, the reason for which he was alleged to be at constant loggerheads with the attorney-general of the federation and minister of justice, Abubakar Malami. He was also accused of abuse of office and his inability to account for several recovered property, among other allegations.
While Nigerians were panting, and in utter disbelief about the allegations, another major and weighty scandal bothering on corruption was burst during the Senate ad-hoc committee session probing the activities of Niger Delta Development Commission (NDDC). In the centre of the probe are some members of the Interim Management Committees (IMC) of the Commission with its former managing director, Joy Nunieh, alleging that the Minister of Niger Delta Affairs, Senator Godswill Akpabio, is the one that actually calls the shots in the Commission.
According to her, “If there is any iota of allegation on corruption in NDDC, it’s the handiwork of the minister because nothing happens in the Commission without his knowledge and approval. So far, revelations by the Senate committee show that in less than one year, the sum of N81 billion was spent by the Commission without any commensurate project to justify the amount.
That is not all, in 2014, the former director-general of the Securities and Exchange Commission (SEC), Mrs. Arumah Oteh, while appearing before the House of Representatives Committee on Capital Market under the chairmanship of Heman Hembe, accused Hembe of corruption bothering on his failure to return unspent fund meant for a trip the lawmaker was to embark to Dominican Republic, but did not go. This allegation was a major indictment on the committee led by Hembe in what analysts call “a thief catching a thief.”
While pouring out her vituperations before the Committee, Oteh said, “When I accepted to take this job, I was told that when I fight corruption, corruption would fight me back, but I could not imagine that it would happen in the House Committee on Capital Market. And now I question your credibility, Honourable Chairman in carrying out this assignment. The reason I question your credibility is that on October 20, 2013, you were given an estacode and business class ticket to travel to the Dominican Republic for an emerging markets conference. Please tell Nigerians whether you actually went there. Also, tell Nigerians whether you returned the money.” This allegation, no doubt, put paid to the Committee’s assignment on the Capital Market before the end of that House.
In 2008, a former minister of health and his minister of state, Prof. Adenike Grange and Arch Gabriel Aduku, respectively, who served in the administration of the Late President Umaru Musa Yar’Adua shook the table when they were said to have soiled their hands by failing to return unspent fund meant for the ministry in the 2007 budget year to the tune of N300 million.
In the aftermath of this, both ministers resigned from the cabinet in order to face prosecution by the Economic and Financial Crimes Commission (EFCC). Many Nigerians have not forgotten the monumental scandal involving the former petroleum resources minister, Mrs. Dieziani Alison-Madueke, for which the EFCC had tried unsuccessfully to bring her back home from her foreign base in order to face trial.
For the second week running, the headquarters of the Nigeria Investment Promotion Commission (NIPC) in Abuja has been rocked by crisis as the workers have locked the executive secretary and other management staff out of the office premises over what they said bothered on corruption and lack of transparency. Among the complaints raised by the staff are wastage of resources on frivolous foreign trips, double standard and deliberate tardiness on all issues of staff welfare, poor understanding of public sector financial management, among others, for which the organisation’s union chairman, Yusuf Mustapha, said every attempt by the workers to draw the attention of the executive secretary to the anomalies had met a brick wall.
He also said it was on record that avenues of civil negotiations and reconciliations had been exhausted by the union, but said despite the protest, nothing has changed.
The list of corruption-driven matters in public office in Nigeria is endless.
Investigations by Blueprint Weekend show how public officers that help themselves to public funds which is the major bane in the fight against corruption in the country. In many cases, as soon as the culprits are detected, they feign illness requiring long sojourn in hospitals in order to recuperate while in extreme cases, they escape to outside countries, yet in other cases, they simply organise arson on the office concerned in order to cover up. In all of these, the nation suffers on every step on the way.
Corporate governance to the rescue?
According to Dr. Ebelebe Onyia of Madona University, Okija, Anambra state, everything about public service failure is tied to the absence of corporate governance code.
“In every organisation, corporate governance introduces internal controls that foster accountability and disclosure. Augmented with ethical codes of conduct and the leadership’s tone from the top, proper corporate governance mechanisms are an important risk mitigation tool that can translate into palpable benefits.
“Good corporate governance practices cannot be imposed by fiat, even if promulgated by the highest levels of leadership nor can corporate governance exist in a vacuum. Firms would find it hard to comply with corporate governance regulations if there are no initiatives to improve the overall legal and regulatory climate in a country where ethics and values, legal and regulatory institutions are guided with policies developed and implemented.”
Continuing, Onyia said, “In dealing with corruption, there are no simple answers. In some instances businesses can be a source of corruption while in others, it is simply a victim. Crucially, the private sector can be a force in developing solutions to the corruption problem, and companies around the world are taking charge by doing it in a multiplicity of ways. Some engage in collective actions to reform the business climate in order to make it more transparent. Others push for ethical standards and fair practices in dealing with the government, as is the case with industry-initiated integrity pacts.
“Private sector solutions to corruption, however, are not only external in nature. Many companies are also beginning to look inside, seeking ways to ensure that they are not unwittingly contributing to the climate of corruption.”
Investigation further reveals that unethical and fraudulent actions in businesses have always been rationalised in a way that the people involved are made to believe it’s justifiable. The profit that they claim such activities bring to the organisation neutralises any regrets or negative feelings that emanate from participating in such activities.
While speaking on constraints to the ease of doing business in Nigeria, the vice- president, Prof. Yemi Osinbajo, said, “The code for corporate governance has been long awaited and it is my hope that it would play a unique role in enthroning higher standards of corporate governance and ethical practices in our business environment, helping to re-build public trust and investor confidence in the Nigerian economy. The implementation of the code in Nigeria is worthwhile and would promote corporate success and economic growth, lower cost of capital, minimise wastages, corruption and mismanagement.”
Its absence leads to abuse
According to Dr. Usman Umaru from the University of Maiduguri, the Nigeria with all its resources belongs to all Nigerians.
“People in leadership positions must understand that they hold the resources in trust for the entire citizenry as well as posterity. They should, therefore, ensure that national resources are transparently expended and publicly accounted for in such a way as would bring increasing level of benefit to the majority of Nigerians. For in this lies the possibility of building protection for our people and in return the extension of loyalty from the ethnic groups to the nation,” he said.
He said further: “Corruption as a result of lack of corporate governance code-raised transaction costs and uncertainty in the economy by skewing the policy-making processes. In many cases, it results in inefficient and irrational out comes.
“Also, it is also important to note that lack of adherence to corporate governance is highly regressive in that it lays a large burden on small and medium enterprises that need to set aside a large share of their time and income to deal with it. This undermines state legitimacy and the rule of law. Ultimately, it leads to wider income disparities because those with influence gain more advantages and those without lose out.”
Elumelu’s take
Speaking about good corporate governance in Nigeria while delivering a lecture at the 4th Presidential Biennial Lecture of Institutes of Directors (IoD) in Lagos, Tony Elumelu, said, “When we talk about corporate governance, people think it is limited to just listed companies on the stock exchange. One-man businesses should also have some set of rules about how you want to govern your business and that has some advantages, including succession. Despite the fact that it is a one-man business, a key concept is succession and when you have sound corporate governance practices, succession to a large extent is addressed.”
He stressed that if an organisation “practises corporate governance, people not linked to the firm would also be able to assess its governance.”
This, he said further, could be attributed to the fact that the most fundamental principle of corporate governance is transparency and disclosure; therefore, every step taken by corporate management is in the best interests of the organisation and its stakeholders.
He also said this has a positive impact on business operations and may reflect upon the market valuation of the firm. Good practices of corporate governance, according to him, also help companies to become more efficient in their businesses, while employees that are trained to follow ethical business practices would avoid excess wastage of company resources but tend to utilise all resources optimally.