Nigeria can enthrone a better culture of corporate governance through probity, transparency and accountability, experts have said.
They spoke at a programme jointly organised by the Society for Corporate Governance Nigeria (SCGN) and the Nigerian Stock Exchange (NSE).
At the programme were directors of the Exchange's dealing member firms and participants from 117 stockbroking and investments companies in attendance.
The society's President, Chief Olusegun Osunkeye, said Nigeria, being a player in the global economy, must apply best practices in its corporate endeavour, while activities of companies must always be open for scrutiny, he said.
A Director and Fellow of the Society, Dr. Chris Ogbechie said evaluation of boards was necessary to ensure effectiveness of directors, increase the level of board teamwork, improve the working relationship between the board and management and provide credibility with stakeholders.
According to him, board reviews are an expensive waste of time unless used to improve the board.
The Legal Director/Company Secretary, GlaxoSmithKline Nigeria Consumer Plc, Mr. Uchenna Uwechia, said complying with the legal and regulatory framework by corporate players was crucial in improving corporate governance.
He said the consequences of non-compliance included disgorgement, refunds, reprimands, fines/penalties, suspension, revocation of licence, criminal prosecution, as well as loss of reputation.
Another Director/Fellow of the Society, Dr. Fabian Ajogwu (SAN), said institutional and majority shareholders are most capable of curbing board and management excesses, as recent experiences have shown.
He, however, decried situations where subsidiary heads and boards report directly to the Chief Executive Officers of parent companies, saying it does not encourage good corporate governance.
The effect is that accountability is reduced and the checks and balances which an effective board would have brought to bear on the company are eroded, he said.
Ajogwu pointed out that the 'control' factor, the ability to appoint the board, determined what happened in such a system, as the CEO of the parent company controls the actions of the subsidiary's head and board.
The powers of the subsidiary's board are, therefore, undermined, and sometimes the head finds himself reporting to the CEO of the parent company rather than his board of directors, which hampers probity.
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