In a speech chronicling what went wrong in the Nigerian banking industry in 2009, former governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi said that “Governance malpractice within banks, unchecked at consolidation, became a way of life in large parts of the sector, enriching a few at the expense of many depositors and investors. Corporate governance in many banks failed because boards ignored these practices …” Have Nigerian companies ceased the practice of selecting board members mainly on political considerations such as an ability to influence government policy in favour of the company? Is Corporate Governance in Nigeria now ensuring true board effectiveness and independence? Have board selection criteria and system for board performance evaluation improved?
Some progress has been made in Nigeria’s regulatory competence evinced by the Nigerian Securities & Exchange Commission’s (SEC) recent handling of a whistle blow by an employee of ETI, holding company of the Ecobank Group, with a footprint in 34 countries across West, Central and East Africa. The whistleblower alleged insider dealing and bypassing of governance structures. The regulator acted by engaging the board and management, and instituting investigations to ascertain the veracity and extent of the alleged breaches. SEC’s actions led to remedial action by ETI including the CEO agreeing to pass up on his $1.14million bonus for 2012 and the convening of an Extraordinary General Meeting (EGM) to deliberate upon and pass resolutions on the critical findings and recommendations of the corporate governance audit. Continue Reading