governance: who guards the guardians?

Governance: Who Guards The Guardians?

Olufemi AwoyemiJune 11, 2019

Four things I wish to achieve

Explain linkage between Governance / regulation and Directorship …and the challenge of trust today;

Present and Interrogate 3 Events that took place in the landscape built around the themes on responsibility, obligation and the burden of Governance as Directors;

Raise issues around what is possible; and

Offer some closing thoughts.

The battle For Truth:

Who can we Trust?

Quis custodiet ipsos custodes

“The essential problem was posed by Plato in ‘The Republic’ - his majorwork on government and morality. The perfect society as described bySocrates, the main character in this Socratic dialogue, relies on labourers,slaves and tradesmen. The guardian class is to protect the city. The questionis put to Socrates, "Who will guard the guardians?" or, "Who will protect usagainst the protectors?"

Plato's answer to this is that they will guard themselves against themselves.We must tell the guardians a "noble lie" The noble lie will assure them thatthey are better than those they serve and it is therefore their responsibility toguard and protect those lesser than themselves. We will instil in themdistaste for power or privilege; they will rule because they believe it right,not because they desire it”.

Who Guards The Guardians….1

Three unrelated events in the last few days have howevercompelled me to take a detour and reflect on the very essence ofwhat it means to be a director of a company in Nigeria today; andperhaps open a wider conversation around the changinglandscape, especially the foundations upon which theseexpectations are premised, administered and determined; with thehope that I can offer you both a compelling reason to appreciatewhat you have signed up to as well as the things you must addressyour minds to, going forward.

I have strong faith in, and far greater expectation from the newmembers of our esteemed institute as representatives of the oasisIoD Nigeria represents as the future of ethical, conscientious andintegrity based leaders of our sovereign entity(ies).

The Battle For Truth….2

Perception …. A Belief or Opinion

/pəˈsɛpʃ(ə)n/

"the way in which something is regarded, understood, or

interpreted.”

The state of Trust:

Holding Up A Mirror

Event 1 …. Independent Directors (On Your Own)

Soft Power or No Power ….

…. What would you have done or believe

should be done in such a situation?

Event 2 …. Directors Removal (On Their Own)

1. Irregular Approval of Director’s

Remuneration;

2. Unjustified Disbursements to Directors and

Management;

3. Failure of the Audit Committee to hold

meetings with Management, Internal

Auditors and External Auditors;

4. Directors’ participation in matters they had

‘disclosed’ conflicted interest;

5. Failure of Internal Controls;

6. Incidental Issues arising from the sale of a

Subsidiary;

7. Suspected Market Abuse and Insider

Dealings;

8. Related Party Transactions;

9. Payment of Interim Dividends despite

liquidity constraints;

10. False Disclosures;

11. Non-disclosure of Beneficial Ownership; and

12. Tax-Related Issues.

Event 2 …. Still On Oando Governance Action……1

Event 2 …. Still On Oando Governance Action……2

Doctrine Of Utmost Good Faith….

…. Or CaveatEmptor?

Event 2 …. Still On Oando Governance Action……3

Investor Protection & Governance….

…. The role or an exception?

Event 3 …. Still On Oando Governance Action……

Is Corporate Governance a

Myth?….

…. The Curious Case of

• Regency / ARC • Abbey Mortgage

Understanding How Governance Works….

“Nobody trips over mountains. It is the small pebble that

causes you to stumble. Pass all the

pebbles in your path and you will find that

you have crossed the mountain.”

In Search of Truth:

Trust Shifts Worth Considering

My sense leans towards the latter prognosis of the current stateof director responsibility, regulatory guidance and enforcement ofbest practice, corporate governance.

This situation unfortunately is further exacerbated by the lackof, absence and the perception that those empowered to exercisesuch oversights themselves have serious issues of corporategovernance to contend with.

Others believe it has to do with man’s Hobbesian state - ThomasHobbes, an English philosopher, considered to be one of thefounders of modern political philosophy best known for his 1651book Leviathan where he propounded the philosophy that

human beings are, at their core, selfish creatures.

Confronting The SELF

The Business Network for Ethics andIntegrity in Nigeria (BNEI) – An initiative ofthe Chartered Financial Analysts (CFA)Society in partnership with the Institute ofDirectors (IoD), Nigeria;

The Convention on Business Integrity(CBi); and

The Financial Reporting Council (FRC)code on corporate governance; recentlyadopted for entities operating in Nigeria.

Where to Get Help/Guidance

3

Closing Thoughts:

Words do Matter

“I want you to be

seasoned. I can pardon

slips from any numerate

professional, but not from

you as a director of a

company; holding the

shareholders trust in

sacred faith”

- Late Prof. Moses Olorunfumi Adeyemi (Feb 1942 – June 2019)

Perception …. The Truth Test

"to thine own self be true.”

- by William Shakespeare

Thank You

Olufemi AWOYEMI | Chairman | +234-803-628-8637 | femi@proshareng.com

Plot 590b, Lekan Asuni Close, Omole Phase 2, Isheri LG, Ikeja, LagosP. O. Box 18782, Ikeja, Lagos State. General Tel: 0700 – PROSHARE General E-mail: contact@proshareng.com