‘CBN audit has improved corporate governance

The Society for Corporate Governance Nigeria on Thursday, in Lagos, said that the special audit by the Central Bank of Nigeria and Nigerian Deposit Insurance Corporation had improved corporate governance in deposit money banks.

A Director and Fellow of the Society, Mr. Fabian Ajogwu, said this at a press briefing by the group on the 2010 Corporate Governance Roundtable.

According to him, “The special audit by the CBN and the NDIC has driven the banks to do more.”

He added, “Prior to this period, issues on corporate governance were just mere talks. But now, the regulator has not just got a stick but can use it on anybody.

“Corporate governance has improved in the banking sector, but there is still room for improvement when you compare it with what is obtainable globally. Also, there is emphasis on risk management now because the banks are scared of getting whacked by the regulator.”

Ajogwu stressed the need to have independent people on the board of companies, saying, ”It is lack of independent and professional people on boards that caused the banking crisis. It is wrong for people to refer to a bank that is publicly quoted as ‘my bank‘. The right corporate governance term to use is our bank because it belongs to many people.”

On director‘s tenure, he said, ”According to the Companies and Allied Matters Act, a director should resign at the age of 70 years, except a special resolution is passed to keep the person on the board. The society believes that non-executive directors should not use more than three years of one term.”

Ajogwu also said that shareholder groups had been hijacked by individuals protecting selfish interests.

He stated, “They have allowed themselves to be used by unprofessional people in the corporate world, especially the banking sector to achieve desired goals of a particular few and not that of the shareholders.”

Ajogwu added that the activities of shareholder groups had been hijacked by some few people, noting that some of them ran associations as their full- time jobs.

The Executive Coordinator of the society, Mrs. Hilda Nkor, said, ”The corporate governance roundtable is created with the vision to advance the understanding and practice of corporate governance. The term roundtable is deliberately used because the session is intended to foster dialogue and discussion principally among institutional investors and other interested parties.”

Source:http://www.punchng.com/Articl.aspx?theartic=Art20101119153562