The Director General, Institute of Directors, Mr. Dele Alimi, in this interview speaks on efforts by the institute to improve corporate governance culture in Nigeria. Ugo Aliogo presents the excerpts:
As the Director-General and Chief Executive Officer of the IoD Nigeria, what would you say are the major contributions of the institute to the economy?
The institute of directors is a prime membership organisation in Nigeria and it basically focuses on capacity development for directors, improving their abilities to deliver on the various mandates they have been given in the various boards, ministries, departments, and companies they are directing. The role of a director is different from that of a manager. The director is like the overall person who gives direction on the way the company should run, so not only do we deal with executives who are managing directors or executive directors or we also have directors who are just on board that is the non-executive directors and we have independent directors.
So what we do is to prepare them in terms of their capacities and abilities to properly manage organisations. The implication is that when organisations are properly managed, it has a positive effect on the economy, employment and social aspect of the country. The institute is striving in all areas to make the Nigerian economy viable and useful for everybody. So I believe that when directors direct well, organisations will be sustainable. When organisations are sustainable employments will always be retained and new employment will be created. Organisations especially those in the private sector if they are performing well will contribute meaningfully to the coffers of the government. They will pay tax as at when due if they are doing their job well, following due process and good corporate governance. Then government will spend less on getting tax and get more from these organisations who are doing well. So when you consider it from both sides, our organisation is in a position to help both the public and private sectors respectively to ensure that members through their various capacities and interventions in their organisations move the country forward. We are also concerned with good corporate governance which means we have concern to ensure that directors manage their organisations the right way. They follow the rules as stipulated by the various regulatory authorities and government such that everybody does things the right way. That is what we are here.
Chartered Directors is something that is present in other parts of the world where there is IoD. How far has IoD Nigeria gone in establishing Chartered Directors?
To have chartered director, the first thing you must do is that the institute itself must be chartered. As I speak with you, IoD Nigeria has gone very far. This is a race that started about three to four years ago. By the grace of God, we are at the last leap of getting a chartered status for IoD Nigeria. Once we have a chartered status, in the house, we will roll out our plans to ensure that we have chartered directors in Nigeria. We are hoping before the end of the year.
Tell us about the Annual Directors’ Conference, which is the Institute’s flagship event. What are you doing differently this year and how are the corporate directors responding to it?
The conference is opening on November 8 in Abuja, with the theme: ‘Global Best Practice in Corporate Governance Way Forward for Nigeria.’ From the theme, you will realise that we are still demanding more in terms of the need for Nigeria to embrace more the spirit of good corporate governance. What we are doing this year is that we are looking at the global best practices, where it has been done and it has been done right and bringing people to come and discuss that.
We are going to have foreign speakers from climes where internationally they have been acclaimed to have very good corporate governance codes that is working and working very well for them. We are bringing them here and we will listen to their experiences.
We are going to have discussants who have worked in those climes. We are also going to have Nigerians who are also in charge of implementing our codes, or contributed to our own governance code. We will discuss the issue. It is a one-day programme. Not only are we examining the issue ourselves, but we are looking at other places where they seem to be doing it better than we are. The special guest of honour is the Vice President and the keynote address speaker is Prof. Bola Akinteriwa. He has written so much on leadership especially as it affects Nigeria and you have the Chief Executive Officer, IoD Mauritius. Mauritius is regarded as one of the countries in Africa with the best corporate governance codes. It is working very well for them, if you look at the ease of doing business; they are even ahead of us. We are bringing the CEO of Mauritius IoD to talk about their own experience, about how they were able to entrench corporate governance code and how they were able to work in their country. Part of our speakers is the President, Nigeria Stock Exchange, Bimbo Banjo, the Head of Civil Service, Mrs. Eyo-Ita, the Chairman Financial Reporting Council, and Mr. Dotun Suleiman. Therefore, it is a rich it is a body of rich speakers to discussants to discuss the issue and tackle the issue.
The charter process of the institute, what are you doing to speed it up?
The issue goes beyond speeding up, because you have to make sure that all the Ts are crossed and the Is are dotted. Don’t forget that it is a legislative thing. It has gone to the National Assembly, and as I speak, it has passed through the Senate already, and they have passed it already. We are expecting that the House of Representative will pass it any moment from now. This is why I stated that within the year, it is possible. If it is passed any moment from now, then we will wait for Mr. President to sign it into law. I think we have waited long enough. We are hoping in the next few months we will be granted a charted status.
What is the institute’s role in corporate governance?
The roles are quite different. You have different categories of staff and workers. In many organisations, you have what is called junior and senior staff. There are management staff and directors. At each levels, there are expectations. There are job descriptions, there are Key Performance Index (KPIs) and everyone has a role to play. But then people look more to the top, where strategy resides, and directions are given, this is where the difference between the director and the manager comes in. It is believed that at the director level things are going well, it is most likely that they will hire the right set of mangers who will be the vision drivers. So the directors are the vision drivers. They set the standard and the strategy. Then they brought it down to the management level that implement. They continue to evaluate and review what management is doing. So if you have at that level people who are well trained, with the capacity and experience to deliver, there is likelihood that management will be well guided. So the directors guide the mangers to deliver on the set strategies put together by the directors. The directors can be divided into executive directors which include the managing director and other executives who are part of the daily running of the organisation. Then, the board who are non-executive directors, the board comes there daily but their liabilities are now so large you cannot be an executive director and say I don’t know when they were doing this.
The rule now takes everyone into consideration. So as a non-executive director, it is important you know what is going on. You must get the fact behind the figures. Directors can no go to jail when companies are not well managed. This is how the practice has gotten to now. Non-executive directors can now go to jail. Various sectors have their regulatory bodies. Even quoted companies, there are new sets of guide lines from the Stock Exchange Commission (SEC), people are now expected to do due diligence on their companies. So when any company invites you to their board, you need to do due diligence on their board and if you are on their board, then you see things are going wrong, you need to blow the whistle to let everybody know. This is part of the whole IoD now plays to prepare them. We have had people who have been appointed to board who are fresh and they have come for training here and when we told them what they need to know, they were quite happy and appreciated us. I know when more papers come to me, I have to read. Before I go to meetings I must read and ask the right questions. Because unless you do that, you cannot govern, the board is there as a check on management. The board is there as a representative of other shareholders who cannot be on the board. So they are representing everybody including the staff because when the company goes down. The shareholder loses his investment and the employers lose their job. So the board is carrying heavy load. So much is expected of them and that is why an institute like IoD wants to continue impact positively on people who are boards and ensure they have enough knowledge to play that honourable task. There are big implications for not doing your job as a body.
Recently, you launched the Code of Ethics Committee. What informed it and how is the committee going to regulate the activities of directors in their various organisations?
The idea of setting up an ethics committee is for members of the institute. We also ensure that our members at all-time are above board in their dealings and activities. Also, in playing properly the roles they have been given as directors. We believe that if we put this code in place, it will transcend any sector. It is a code that will guide directors. Our aim is not to be punitive. We believe that at any point in time, you have issue, we will give you what to do in terms of blowing the whistle. The whole idea is that as a member of IoD, there is a particular level of standard that is expected of you and if you fall below it, there will be sanctions. Also, the reason why I said it is not going to be completely punitive in nature is that when we notice that a member is erring. Standing on the existing ethics code that we have, we can write the member. The institute believes those actions you have taken is contrary. So it is also going to be advisory in nature and that will not be within our control. Our code of ethics is within our control. We are not going to be waiting on government and regulatory authorities. We will have our own committee. For instance, Institute of Chartered Accountants of Nigeria (ICAN) has its own disciplinary committee no matter what the court does. Once a member is reported ICAN has a way of disciplining such members. We have members whose certificates were withdrawn and removed the register of ICAN. This ethic conduct will ensure that members are able to live above board as the conducts are concerned.
2019 is an election year? What are the institute’s expectations what role will the institute be playing?
Our expectation is that we have a free and fair election that will bring out the best Nigerians to lead the country. Going forward, IoD will participate in the discourse that will lead to the emergency of good governance. As I speak with you, we are planning to hold a pre-election discourse with some major contenders for positions in this country such as the presidency and governorship candidates of states where we have branches. We want to engage them through to allow people hear them and see what they have in stock for corporate Nigeria and the country in general.
We are hopeful that as the country is becoming older, we will continue to entrench the values the right kind of leadership with other BMOs in the country for the development of the election.