Accra, May 05, GNA – Mr Rockson Dogbegah, the Chairperson of the African Corporate Governance Network (ACGN), says the inability of private sector players in Africa to mobilise financial resources from both domestic and international sources is due to poor corporate governance.
“Organisations that anchor their culture on the foundation of good governance principles are most likely to do well. They practise ethical and effective leadership, ensuring sound controls are in place and making sure the organiaation has a strategy well aligned to it’s external and internal environments, which is constantly monitored and reviewed.
” These naturally leads to good performance and acceptability by stakeholders and as a result are easily able to attract capital support, including foreign direct investment to scale up and operate sustainably,” he said.
Mr Dogbegah said this when he launched the Institute of Directors – Sierra Leone( IoD – SL) to promote good corporate governance in Sierra Leone.
“The politicisation of the appointment process to Boards in Africa is sometimes worrying. The appointment of Directors of SOEs and parastatals in Africa to serve on public Boards is guided by politics, ethnicity and patronage as a political compensation for their support. Many of these Boards do not develop, implement and communicate internal codes of ethics that should apply to all employees, senior management and the board members themselves,” he noted and said such practices did not enhance good governace outcomes.
“Though some may be qualified, a great majority know very little about corporate governance. They view their appointment as full-time jobs. Training will be required for such appointees who lack corporate governance knowledge as a prerequisite to serve on the board to ensure their proper contribution in the boardroom and this is where the Professional Corporate Governance Institutions such as the Institute of Directors present in most African countries come in to play their role.”
He said it was often the case in public corporations and SOEs that either the MD or the Board Chairman exercised inordinate control, depending on who was politically stronger.
” I have seen MDs entirely run the show, totally oblivious of the role of the Board. Some Board Chairmen and members crawl up to them for small favours, which may include fuel chits, transportation, overseas trips, increases in Board allowances or anything under the sun. Good corporate governance frowns on using the organisational resources to advance personal interests.
” Alternatively, if the Board chair is the one with the political connections, he will leave the MD in no doubt as to who is the boss. Board members embark upon soliciting the employment of relatives and friends and getting contracts, often circumventing procurement rules.”
Mr Dogbegah said some Board Chairmen insisted on offices and Board members came to regular work on a daily basis as if they were employees and that should any of those mighty parties clashed, the institution would be thrown into turmoil.
He said improving corporate governance in many institutions and companies in Sierra Leone would result in overall greater prosperity for all and lauded the idea to form the IOD-SL.
The organisation will have external affiliations, recruit and train Board members and serve as a veritable resource pool for public and private institutions.
ACGN encourages best practices in corporate governance among African institutions, and contribute to capacity building in corporate governance.
The Network was formed to develop the institutional capacity of members, enhance effective corporate governance practices and build better governed and more accountable private and public sector organisations in Africa.
GNA