Kayode Akinsola ESq is a Corporate Governance experts and the Managing Partner of Queens Attorneys LP.
In this interview at his office of Victoria Island Lagos, Nigeria, he speaks about the application of tenets of corporate governance to governance in the country.
What motivated you into Corporate Governance as a carrier?
With my two decades of observing the corporate environments, I saw the structural gaps in various companies as well as multinational organizations in Africa, which is a reflection of leadership decadence that had permeated through our cultural way of life.
What’s Corporate Governance?
Corporate governance is the way and manner in which the affairs of companies are conducted by those charged with the responsibility. This, has positive link to national growth and development of any nation.
What do you think are the pillars of good corporate governance?
The pillars of good corporate governance are, Transparency, Security, Accountability, Fairness, Assurance and Management. Without these, no individual organization could grow or continue to exist.
Why do you think we need a corporate governance?
A: A corporate governance is necessary in every corporate society. It enables organizations, firms to achieve their goals and have a controlled risk and assuring compliance. Good corporate governance incorporates a set of rules that defines the relationship between stakeholders, management and board of Directors of a company and influence how the company is operating.
Can you mention the key objectives of corporate governance?
The board remains in effective control of the affairs of the company, the board keeps the shareholders informed of relevant developments impacting the company, the board effectively and regularly monitors the functioning of the management team, the board accepts transparent procedures and practices and arrives at decisions on the strength of adequate information.
Can you mention the main issues in corporate governance?
Here are about of eight of them but the main ones are Accountability, Shareholder engagement, Leadership, Transparency and Fairness.
In terms of models, are there some time tested ones that can enhance good corporate governance?
It should be noted that there is no perfect model of corporate governance but there are three dominant model, existing in contemporary corporations: the Anglo-Us Model, the German Model and Japanese Model.The Japanese Model is the most concentrated and rigid while the Anglo-Us is the most dispersed and flexible.
The phrase poor corporate governance is commonly used, what does this entails?
The phrase entail poor and mismanagement of corporate organization. It is also entails lack of transparency among the board members, It is the inability to achieve the intended purpose of the company, It is the waiver of rules relating to conflicts of interest.
What is your assessment of corporate governance in Nigerian corporate world?
The Financial Reporting Council of Nigeria (The FRCN) issued Nigeria Code of Corporate Governance in 2018, the code which is aimed at companies of varying sizes across different industries, seeks to institutionalize corporate governance best practices and promote value and ethical practices that will enhance the integrity of the business environment. With the advent of regulations and laws on corporate governance, it reduces vices in the corporate sector. Hence, the level of compliance has over the years increased.
Can corporate governance model be applied to the political terrain to foster good governance and how?
Yes! Corporate governance model can be applied to a political terrain.Corporate governance is about enabling organization to achieve their goals, control risks and assuring compliance. Good corporate governance incorporate a set of rules that defines the relationship between stakeholders, management and the board of directors of a company and influence how company is operating, in doing this, a check and balance should be put in place in every corporate sector.
Big companies should create a supervisory body, where shareholder elects the members of supervisory body, employee also elect their supervisory body. The companies should also establish board of management; the supervisory body appoints and monitors the management board.
What is corporate failure and what factors are responsible for company failure?
Corporate failure is the inability to make profit or achieve the aims by which an organization is set or established, due to poor management skill, incompetence, and bad marketing strategies. Factors responsible for company failure include: Improper management of the affairs of the company, Technological causes, Working capital problems, Economic distress, Fraudulent management, Dishonest audit committees, Poorly structured board, Increased in operating expenses.
What do you think are the ethical issues in corporate governance?
The ethical issues are: Conflicts of interest, Transparency, Diversity, Remuneration, Stakeholder accountability, Ownership of interest and Weak board.
What are the salient issues in corporate governance in Nigeria?
They salient issues in corporate governance in Nigeria are Transparency and half disclosure, Regulatory laxity, Corruption and fraud and Ignorance of minority shareholders.
The case of First Bank of Nigeria, what is your take ?
The case of first bank is a breach of Code of Corporate Governance for Development finance Institution by its board of director.
It is the duty of board of director to make a proper consultation with CBN for the removal and appointment of its director and Chief Executive Officer as entrenched in code of corporate governance for the development finance institution in Nigeria.
The First Bank board of director erred in law by failing to comply with the enabling law. Compliance with the code is mandatory for all DFIs failure to comply with the code will attract appropriate sanction in accordance with section 64 BOFIA CAP BS laws of the Federation of Nigeria (LFN) 2004. In summary, the CBN was right for making such a bold resolution to preserve the stability of the bank, and to protect minority shareholders and depositors.
Nigeria economy has continue to witness a downturn with inflation figure and jumping while unemployment rate is in the increase, vis-à-vis with cost of goods, what is really the problem and what are the ways out of these quagmire?
The problem resulted from insecurity, neglect of agricultural sector, wrong impression about vocational training, corruption prevailing in the country and rapid population.The best edge against inflation is to invest in a stable alterative sector.
