Bode Ayeku is the president of The Institute of Chartered Secretaries and Administrators of Nigeria, ICSAN. He is strong advocate of establishment of corporate governance structures in organisations that will not only see to the smooth operations but long existence of businesses. In this interview, he told Daniel Obi that the theme of ICSAN 2020 Conference is ‘Entrenching the right governance framework for economic development and sustainability’. This is the year that the principles of corporate governance will be tested as all organisations are challenged by Covid-19. He said the conference scheduled later this week is to reinforce why corporate governance framework must be entrenched in every organization as survival of any entity rests on corporate governance. Ayeku spoke on other issues. Excerpts
Congratulations on your recent appointment as the Vice President of the global body, the Corporate Secretaries International Association, what are the implicaitons for Nigeria?
The election was done in September, 2020 as ICSAN has been part of this global association for years. The most important implication is the recognition of the contribution of ICSAN to the development and growth of corporate secretaries international association. The only way a global organization will allow a representative of a member institute to be elected is that the member should have been contributing to the progress of the global body. The other impact is that it gives us further perspective or opportunity to know what is happening at the global space, know what others are doing and incorporate some of those things. Again, other international members are monitoring our programmes and learning from them. The whole essence is to see all members progress and be a global voice on corporate governance. It is also possible to have international code of corporate governance as the principles are the same.
What are those corporate governance principles that companies can apply now to survive the turbulent environment?
The good thing about challenges facing corporate bodies is that it is not peculiar to Nigeria. Covid-19 is a common denominator all over the world and the impact of the pandemic is massive which is affecting the private and public sectors and individuals. The same set of corporate governance principle will still be required to stabilize and take off on a very sound note in such a way as busineses will continue to grow. One of those principles is transparency of business operation and issues affecting the business. For instance because Covid-19 has disrupted operations, it is important that all the stakeholders be informed in a transparent manner. Second principle is Fairness in dealing with issues and partners during this time as nobody caused the pandemic. The third principle is responsibility. The responsibility assigned to stakeholders must be done in a sensible way. Accountability is the forth principle which is key. Every stakeholder must know that they have some expectations from each other. For instance, Lagos State government is communicating to stakeholders the wanton destruction during EndSARS protest so that when the budget is revised to take care of the destruction, people will have understanding. This is accountability and openness. This should be applicable to both the private and public sectors to let the stakeholders understand the challenges the business is facing.
How would you rate the implementation of corporate governance among businesses in Nigeria?
The Nigerian Code of Corporate Governance 2018 which was released early 2019 has tremendous positive impact on public companies and particularly public listed companies. There are principles that are now recommended for adoption. The first point is that they did not have any intention to ambush anybody. It was perhaps one of the few regulations released within time line for compliance. It was released in January 2019 and informed every stakeholder that they are not expected to comply or report compliance immediately. They gave businesses uptil 2021 to start reporting. This has allowed discussion on how to comply with the code. As long as there is constant discussion, it will generate ideas that will provide solutions. Since reporting will start next year, the Reporting Council of Nigeria is working with Nigerian Stock Exchange to develop the template for reporting. At the end it will have buy-in of most stakehoders to incorporate their input. It is not peculiar to public listed companies, private companies are encouraged to imbibe the code. It is in the interest of every investor to ensure that their entities are on for a long time. The aim of any establishment is long time existence and this is not by profit earned but by structures put in place to guarantee the sustainability of that particular entity. Corporate governance structures allow long existence of business whether the owner is there or not. This is to have the right knowledgeable, diverse and inclusive board of directors, internal control, external auditors, introduce Economic and Sustainability reporting among others. It is in the interest of all business concerns, whether big or small to imbibe the corporate governance code. For instance, some of the founders of multinationals are dead or old but the businesses keep running. This is because of the introduction of corporate governance structures. If the business is about profit, the business will crumble one day but corporate governance will ensure long survival of the company.
What lessons can Nigerian businesses learn from Covid-19 to withstand future turbulences?
For the private sector, the lesson is very key. Before Covid-19, the private sector used to have business continuity plan to checkmate shocks that impact operations. Now Covid-19 has reinforced that as normal position. Many managers have not been in their offices for months but they are still effective. For instance, if some companies did not have effective digital systems, the business will collapse. Local challenges such as EndSARS also taught us lessons in this direction.
For me, the sector that should take the greater lesson is the public sector. It was about a week ago that the some state governments and some Federal Government agencies gave intructions to some of their workers to start coming to office. What happened is between April and October, workers on grade levels 1-12 were at home doing almost noting as they could not work at home due to lack of digital systems. How many of them have computers, perhaps 10% of them and most of them are desktops. Covid-19 has exposed the government on the need to quickly invest in digital operations to obviate such losses encountered during Covid-19. Government paid for services for a period of seven months.Those workers were willing to work but government did not empower them as it is the responsibility of the government to provide the work tools. What the public institutions should do now is massive investment in technology to enable workers work from anywhere and to enable storage of files. Nobody imagined that the protesters will burn files at the courts. This will now take years to re-create the records because the files were not archived electronically. If Covid-19 did not fully reveal the urgent need to invest in technology , the endSARS protest exposed the weakness that manual way of working is no longer acceptable. Again, why on earth should we be conducting elections manually after Covid-19. Even manual elections is expensive. Nigeria public and private institutions should quickly embrace digital ways of doing things as lessons from Covid-19 and endsars have taught.
The corporate governance code seems to target the private sector, what of the public sector?
At the Institute our believe is that there must be governance code for both the public and private sectors. The reason is simple. We cannot have an economy without both sectors. The governance principles are applicable to both sectors. If all sectors are impacted by the pandemic, there is urgent need to rejig the systems to operate efficiently. Since it is the public sector that regulates the private sector, there is need for them to show leadership in imbibing corporate governance principles for efficiency as they cant be prescribing something they don’t do.
What do you consider as the cost of government’s delay in implementing digital operation in their system?
This is so obvious. What is the total amount of salary paid to workers that stayed at home during the Covid-19 without facility to work at home. Secondly, a lot of opportunity and operations that should have generated money for the government were lost because many of the operations are manual. Agencies charge fees on the services they are rendering. Take Corporate Affairs Commission, CAC for instance. If many clients filed services but could not be serviced, fees are lost but salaries were paid. The same is Ports authority. If these offices digitalise their operations, government would have earned substantial amount of money. The cost is both actual and opportunity cost. Actual cost in the sense of what are those expenses on services they incurred that would have generated money. Secondly, what are those revenues that government would have generated if their offices have rendered those services digitally. The costs are massive. Investment in digital is the minimum investment to have seamless service.
