CORPORATE GOVERNANCE: THE TURNING POINTS - UBA Plc

The GMD’s Inspirational LectureRigorous enforcement of rules is therefore crucial for building asustainable atmosphere of good governance in any corporateorganization/environment. To illustrate this point, it may be notedthat what happened at Cadbury Nigeria Plc. was not muchdifferent from what the former management of Lever Brothers Nig.Plc. In the Lever Bothers Nig. Ltd. case, no serious sanction wasimposed on those responsible for, or under whose watch thecompany’s accounting records were cooked-up. Perhaps thesubsequent Cadbury scandal would not have happened had theLever Bros. Nig. Plc. matter not been lightly treated. Compare thiswith the Bernard Longe case with First Bank of Nigeria Plc., wherea Managing Director was severely sanctioned, not for acts ofcorruption or self-serving, but for not complying, amongst otherthings, with the bank’s credit rules, in granting credit to acustomer. Some of the rules allegedly breached relate toexecutive approval limit and single-obligor credit limit. Perhaps theparticular transaction required to be consummated urgentlywithout sufficient time to comply with all approval requirements,so the Executive involved granted himself what in Nigerian speakis called ‘anticipatory approval’. Perhaps it was not even the firsttime he would be doing so to the immense benefit of hisemployer. Perhaps if the transaction had succeeded again, theBoard of his employer would have patted him on the back oncemore as a wonder kid. Unfortunately, that particular transactionturned out a business mistake causing heavy loss to thecorporation. Thus what started out as one of the most promisingbank top executive career in Nigeria was brought to a widelylamented abrupt end. But by demonstrating such firmness in itscorporate governance rules, the concerned bank and its boardsent-out a clear signal to subsequent chief executive officers thatit would not tolerate deviance from those rules. Rules may beinnovated; compliance may not.19 | P age