The Director-General of the Institute of Directors of Nigeria, IoD Dele Alimi, says the nation’s banking sector would have collapsed if not for the corporate governance rules introduced by the Central Bank of Nigeria, CBN. The DG said the rules really checked the commercial banks from insider abuse and preserved the sector from total collapse.
Critics of Emefiele insist that the government bank has fared well in the area of ensuring that banks followed corporate rules, despite its failings in other critical areas, such as its obvious failure to save the naira from losing its value against major foreign currencies.
The CBN has also failed to checkmate rising inflation as the price of essential food items have now gone beyond the affordability of the average Nigerians.
“The CBN under Emefiele has tightened the belt on banks to ensure that they are sanctioned when they veer away from set down rules. All the management abuse we use to experience in the sector has reduced tremendously because banks no longer want to fall under CBN hammer,’ an analyst said.
He explained that insider abuse would have led to the collapse of some banks, with many shareholders and customers losing their funds.
“That was the situation in 2010 before former CBN Governor Lamido Sanusi came on board, and wielded the big stick on some erring banks which eventually led to merger in some instances and collapse of other banks,” he said.
Alimi told The PUNCH that it’s not yet uhuru, urging the Godwin Emefiele-led CBN to ensure that it doesn’t relent in its effort to entrench the rules in the system.
“Truth is that we have come a long way when we look at corporate governance in the banking sector. I agree that for a long time, adequate attention was not paid to good corporate governance in the sector, especially because the regulators did not provide the required supervision.
“In fact, the CBN must be commended for the timely interventions in recent times, which nipped in the bud what could have been a more devastating situation in the banking sector,” he said.
The CBN recently intervened in First Bank of Nigeria, reinstating its ousted chief executive officer and sacking the board of directors, criticising poor corporate governance issues in the bank.
Alimi emphasized that it will take time for the rules to be fully entrenched in the system.
According to Alimi, “The fact that this document is public has made people realise that there is a standard by which directors can be judged unlike before when anything would go. The code is a conglomerate of all best practices rules globally.
“However, what we have done is to look out for the best and bring them together within our own environment, taking into conclusion the peculiarity of our own environment and also the needs of our people and our economy.
“To an extent, it has impacted well, and shareholders now know what to do and how to hold people accountable when they are on boards of organisations.”
