Ahmed Rufai Mohammed is the 15th president of the Institute of Directors Nigeria. He joined IoD in 2005 and had served as the 1st vice-president, vice-chairman, Nomination and Governance Committee, chairman, Finance & General Purpose Committee of the Institute, among other responsibilities. He shares his thoughts in this interview with SEYI JOHN SALAU on the institute’s role in corporate governance in Nigeria and the need to have a private sector-driven economy.
Could you give us a brief overview of the Institute of Directors?
The Institute of Directors (IoD) has been around for about 34 years now. IoD started as an affiliate of the Institute of Directors, UK. It was established in 1983 while IoD, UK was established in 1803 and became chartered in 1806. The institute was founded by some notable Nigerians, and its major objective is to advocate for corporate governance both in the private and public sector. The institute is deeply into advocacy with about 4,000 members across the country. There are three categories of membership, which are associate, ordinary and fellows.
You said IoD UK got chartered after three years. What is the institute doing to get IoD Nigeria chartered?
The governing council of the IoD which was established under statutes of the IoD never deemed it necessary to get IoD chartered because chartership is not a category of membership under the IoD. To be a director, you do not need to be a chartered person, because directors are not appointed by the IoD. You become a director or you decide to be a director before applying to be a member of the IoD.
As long as you understand and can meet the criteria set up by the governing council of the IoD – you can register to be a member of the institute. So, it is only now that the governing council felt it is appropriate to introduce charter membership into the IoD. At the moment we have done the public hearing with the Senate committee about a month ago at the floor of the Senate, so we expect to be chartered, hopefully, latest next year. The chartership status gives the IoD a lot of latitude to register more members who desire to have the chartership status, and to be able to work with their peers from other companies in the country where they have chartered directors.
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What would you consider as the institute’s achievements since inception?
IoD was established by very diligent and distinguished people who contributed immensely to the development of Nigeria. Because we see our achievement in terms of objectives, our major objective is two-fold: governance advocacy and capacity building of directors. The IoD has been able to train lots of directors. Nobody is admitted into the institute without being trained on the basic Company Director Course, which is called CDC1. So all the 4,000 members have gone through this DCD1 course, and many companies have had their directors trained by the IoD. We also provide capacity building for directors in the public sector as well as consultancy, executive coaching, capacity development through continuous education and business development that allows for networking among members.
To be a company director you have to be knowledgeable because a company is a mini-government with its own board, management, and stakeholders. And the director must understand the essence of governance because there is a difference between governance and management, and if there is no governance, the company might collapse. There is a need for directors to understand basic things like ethics, integrity, transparency, accountability, company regulation, succession plan, risks evaluation, and the IoD has been in the forefront of all these things. As a matter of fact, it is the essence of what the institute has achieved in providing corporate governance knowledge and how best practice can be introduced to companies.
In what way does IoD specifically promote corporate governance in Nigeria?
IoD is an independent organisation and as such, has no relationship directly with any government except private enterprises, a non-profit organisation established by people who only desire to see corporate governance being carried out properly, especially in the private sector. Eventually, we moved into the public sector; so our relationship with the government is basically on what we do with building capacity, especially those in the civil service at the level of permanent secretary.
At that level, a lot is required in terms of capacity building to help the civil service grow, just like if you are the CEO of an organisation, you work to help it function effectively. As such we help them to train permanent secretaries. And we need to understand that governance is very wide, but certain fundamentals must be got right. That is where the IoD comes in as an independent entity to help build capacity, and we have been training lots of technocrats in the Lagos State government. Because of our proximity to Lagos, we have enjoyed a good working relationship with the Lagos State government, but we are beginning to reach out to other states.
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One of the major problems we have in Nigeria is governance, while in the public sector it is lack of knowledge in many cases: understanding, appreciating and comprehending how you need to balance situations. You cannot show interest in what Raji is doing without being transparent, and as a public servant you do not really have to show interest in anything because integrity, ethics must be paramount in what you do, and code of ethics is part of governance that you must have as part of an organization.
The IoD is working to ensure it is enshrined in Nigeria. The private sector in any country has been responsible for the growth of the economy and that is the way it is supposed to be in Nigeria as well. And the only way we can make that happen is by engaging the government because the government controls the economy to a large extent. So there must be a gradual transfer of government activities to the private sector that has nothing to do with social services. Today in many countries the railway system is privately managed for better efficiency mostly through the Public-Private Partnership (PPP). So, the only way we can grow our economy profitably is by opening it up to be private sector-driven.
The economy is run by two sectors, the private and public sector, but if the government does not have confidence in the private sector, it will not transfer those rights to manage and drive the economy to it. Government creates both the policies and policing of the business environment to ensure the right things are done and that rules are adhered to stimulate the economy. So the government must be seen to be total from all perspectives – private, public sector – and as such advocacy is what we use to engage the government.
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Nigerian economy tilts more towards the public sector; how can the government ensure an economy that is private sector-driven?
You cannot turn the economy around unless you know, and knowledge does not exist in government alone; it exists largely in the private sector. Many of the executives in the private sector have trained themselves and continue training themselves to understand how they must drive those enterprises to be productive and make money out of them. People who do this knowledge about how the economy should run; so there is a continuous dialogue/engagement between the private and public sector for the government to take itself away from those activities that are not government activities, instead, they should set the policies and police the business environment – which is the way it is supposed to be.
Most economies of the world are growing today because they are being led by the private sector. When you are appointed as the CEO of a company, you present a forecast to grow that company properly and make it perform better, and we can see clearly this is the only way we need to follow to grow our economy – by moving away from what you are not competent to do unto allowing those with competence to do it and allowing yourself to do what you have the competence to do effectively. We talk about competitive advantage in terms of economic structure – for instance, if you think Lagos State is the best place to get fish, don’t worry yourself about going elsewhere looking for fish; and I think the private sector has been able to show that leadership in Nigeria in terms of improvement.
Any plans for the IoD?
We are looking at organising the Young Directors Forum to get people prepared ahead for becoming directors and managers of both human and materials, with the establishment of the international training centre. Our ultimate plan is to make the institute the employment of choice for job seekers in Nigeria, and the establishment of branches across all the geopolitical zones of the country.
