KADUNA State Governor, Nasir El-Rufai has stressed the need for privatised State Owned Enterprises in Nigeria to enshrine Corporate Governance as essential policy for their transformation and competitiveness.
The Governor, who was represented by the Executive Secretary of the Kaduna Investment Promotion Agency, KADIPA, Gambo Hamza, was speaking at a one-day Corporate Governance Training organised by the Bureau of Public Enterprises, BPE, for its Alternate Directors on the boards of privatised Successor Electricity Companies, which held in Kaduna on Saturday, May 21, 2016. El-Rufai noted that the concept and practice of Corporate Governance would not only increase productivity and competitiveness of the hitherto SOEs, it would also help to ensure that public funds invested in them are not mismanaged but are spent efficiently.
According to him, by creating more transparent and economically viable SOEs to be privatised or that have been privatised, Corporate Governance would ensure actual service delivery to the public which would guarantee the public or consumers value for their money.
He said that in many countries, Corporate Governance has not only been used as a tool to improve the efficiency of the SOEs, but also as a mechanism to improve their attractiveness to investors, thus increasing state income from privatisation and post privatisation processes.
The Governor said the convergence of the global economy towards market based systems has elevated the concept of Corporate Governance to a new height and this has brought pressure to bear on the modern day corporations around the world to comply with international best practices and standards.
“It is becoming increasingly recognised that companies should be managed efficiently following prudential guidelines to protect the interests of stake holders rather than promoting insider abuse. Nigerian companies are not exempted from this Global trend. The various opinions which explain the positive and negative aspects of separating ownership from management in the modern corporation make corporate governance a sensitive subject. This leads to a number of issues relating to efficient control of the assets of corporations in the interest of all stakeholders”, he stressed.
The Kaduna Governor maintained that the broader view of corporate governance, as a set of mechanisms which deals with institutional reforms beyond just company-level changes, suggests that it is one of the integral components of successful development strategies. He said Corporate Governance is fundamentally central to building competitive economies, reducing corruption, promoting property rights, and creating jobs and wealth – all of which are components of successful poverty alleviation efforts.
He said efforts to promote Corporate Governance must take into account the drivers of reforms – both positive and negative. On the negative side, he noted, drivers of corporate Governance are most frequently associated with financial failures and corporate scandals.
“This set of drivers’ exhibit a reactive approach to introduction or practice of good Corporate Governance. A more proactive approach is associated with positive drivers, which include investment drive, increased competitiveness, and anti-corruption successes. Seen in this light, corporate governance can be used as a tool to spur broad-based reforms in the areas of investment and company laws, property rights protection, enforcement mechanisms, accounting and tax laws, judicial reform, and others”, he added.
The Governor advised that to implement Corporate Governance successfully in SOEs to be privatised, Government should initiate a transparent process and recognise Corporate Governance as a competitive policy and that to address the problem of corporate abuse in Nigeria, it is imperative to diagnose and understand local issues before simply importing “best practices” from other climates. “After getting a grasp on local conditions, reformers should develop strategies to resolve specific problems. Some of the drivers of corporate governance – privatisation, capital markets participation, anti-corruption, capacity building, and standardization – represent different ways to achieve implementation, and might also provide useful starting points”, he said.
El-Rufai said that as successor companies to formerly SOEs, it was paramount that the Alternate Directors on the Board of the companies must re-orientate their mind-sets and transform their attitudes.
Responding, Acting Director-General of the Bureau, Vincent Onome Akpotaire said that as one of the founding fathers of Nigeria’s privatisation programme, El-Rufai’s activities as Governor of Kaduna State are a source of pride to the Bureau.
He said that the Bureau shares in the Governor’s aspiration for Kaduna State and Nigeria as whole, adding that the Governor has, “been a worthy ambassador of the Bureau”.
— May 25, 2016 @ 17:45 GMT