In absence of corporate governance code for Nigeria’s public sector as it is in the private sector, Ministries, Agencies and Parastatals have been told to incorporate compliance officers in their management structure who will ensure rules and ethical standard procedures are followed for effective performance of the MDAs and growth of the economy.
The appointment of compliance officers, who shall be senior management staff with duties and functions well spelt out and who shall be protected from immediate sack on the whims of the head of agencies or commissioners has become significant in the present day economy. The compliance officers are expected to give independent advice and assist in driving the agencies and the parastatals along the path of best practice, transparency and accountability.
In the private sector, it is mandatory that companies shall appoint compliance officers who are usually company secretaries whose duties include ensuring the integrity of the governance framework, ensuring compliance with statutory and regulatory requirements and implementing board decisions.
Speaking to BusinessDay recently, the President and Chairman of the governing council of Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN), Bayo Ayeku suggested that pending the time there will be a code of corporate governance for the public sector , every institution, agency and parastatal should have a compliance officer. “The value they offer is important in driving the agencies according to global standards. They challenge the system for efficiency”, he said.
Ayeku recounted that a compliance officer in the private sector is able to advise the chairman of the board and the managing director professionally without any fear or favour and he/she cannot be removed easily or without due process.
“We are advocating such role in the public sector. The compliance officer will not be studying the mood of the DG, Commissioner or the head of the agency before advising him or her”, he said.
He warned that the appointment of secretaries without clear qualification, mandate, functions or appropriate placement in the management structure as obtainable in the public sector does not equate to compliance officers whose functions involve governance, direction by ensuring institution’s activities comply with legal and ethical requirements.
On lack of governance code for the public sector, Ayeku said what the reporting council attempted to do in 2016 was to have a three- in-one code of corporate governance. To have part One dealing with the private sector, Part Two dealing with the Public sector and Part Three dealing with Non Profit sector.
But the position of MDAs is that such code will infringe on statutory provisions setting them up and a code cannot override the law. “Their position was that there was the need to amend the existing laws setting them up before the code can be applied. With this controversy, government decided to focus on the private sector”, he said.
Assessing adherence to Corporate Governance in Nigeria, ICSAN president scored the private sector high but said there is still room for improvement. He said corporate governance is important not only for the companies but the stakeholders, government and the economy.