Eliminating corruption requires more systematic approach, says NIM president

Professor Munzali Jibril is the President and Chairman in Council, Nigerian Institute of Management (NIM) Chartered. In this interview with BENJAMIN ALADE, he spoke about a variety of issues including the need to reinvent the rules of corporate governance as catalyst to tackle corruption, economic policies, and the Institute’s forthcoming annual management conference.

You are having a conference on corporate governance and institutional performance, what informed the theme?
Corporate governance is at the root of the problems of this country whether it is the private or public sector, because if you look at all the things going wrong you would find that the rules of corporate governance are being flouted, that is why we have the problems we have. The framers of the constitution in their wisdom created the National Assembly as the check on the enormous powers of the executives but they are not performing that function. Most of the time, they are pursuing their own self-interest. For instance, the Chairman of the Committee on the Downstream sector is competing with the Minister of State for Petroleum and the GMD of NNPC in terms of accumulation of resources and exploitation of the system. The Chairman, Committee on Federal Character, says: “my target is to get employment for 1,000 people from my constituency every year.” That is how he measures his achievement not on ensuring that the provisions of federal character are conformed with in employment, which is a conflict of interest. You are there to do one thing in the interest of the system; you are doing something else in your own interest. The governor embezzles public funds or diverts funds meant for projects to a private business. Corporate governance says your personal business is separate, and you must never allow it to interfere with your official responsibilities.

There are examples of leaders who have done in the past, like the politicians of the first republic; most of them complied with this. For example when Azikwe was the major shareholder in African Continental Bank and there was a problem, he donated his shares to the Eastern Nigerian Government, and completely exited the bank. It was his own bank, he founded it with his money but when there was something that was challenging his integrity, he made the government of the Eastern Nigerian buy his shares. Then some members of eastern Nigerian raised the issue in the assembly, and it threatened to become an issue, and there was an inquiry, which established that government did buy shares to save the bank. Nearer home, some of our founding fathers of this Institute like Gamaliel Onosode, are people of integrity that would never allow their personal interest to influence their official functions, and their greed; they put it in check because every human being has greed. You have to put it in check and make sure that it doesn’t go on the wrong page.

How would you rate corporate governance in the last two years of the present administration?
I believe that at the very top the President and his Vice without a doubt are people of high integrity. I also believe that quite a number of the ministers are of high integrity. I know a Minister who told me that he used money from his pocket to buy fuel for the generator to power his office. I believe that because the provisions in the Ministry’s budget wouldn’t be sufficient to carry that burden throughout the year, so he was using money from his own pocket. There are people of integrity, people have been making sacrifices, but I can’t say that it’s everybody, because the selection process was not as thorough as it should have been. Quite a number of people who appeared to be good when placed in good positions turn out to be something else. So I would say that overall, it has been good but it is not perfect, there are still loopholes. We are having revelations now about the previous regime; it doesn’t mean wrong things are not going on now under this regime but they haven’t yet come to the surface. But the good thing is, because the top people are not themselves corrupt, if anything should come to the surface, it would be dealt with, and it would not be buried under the carpet. An example, just recently, the Acting President nominated some people for the ICPC membership, as soon as issues were raised that they were under investigation by the same Commission, he promptly wrote for them to be withdrawn. Previous governments would have tried to justify and they will defend. What matters really is the top, because if the top is clean, if there is any problem, it will address it but if it is also compromised and dirty, then if there is a problem, it would try to wriggle its way out of it.

The country has been experiencing different challenges in the past two years, there have been recession, depleting foreign reserves, and government has been coming out with different policies. What right policy choices has the government made, and what are the wrongs?
I think for the first time in the history of this country, there was an attempt to address the social security issues. The N-Power, conditional cash transfer scheme. Maybe as pilot scheme they started on relatively small scale, but really, what one would like to see is a full blown welfare system. Of course it goes side by side with a very stringent and efficient tax system, because it is the tax that is collected that would pay for the welfare scheme. But the challenges we have in terms of security, rising crimes. These are all related to the level of youth unemployment and general unemployment and skills gap in the country.

There are millions of people who have no skills to sell, they have no education, and yet they must survive. In the pre-colonial days, everybody had to go to the farm; otherwise you will die of hunger. Now, because of mechanisation, you don’t have to produce your own foods, you can buy food produced by others but you need cash and that is not available, and yet people see those who have an excess of it flaunting it before your face. We need to put a welfare system in place; we need to address youth unemployment. These policies are in the right direction but they do not go far enough. I will not say they have introduced any bad policies, I’m not aware of any, but there are lots of good policies that they need to introduce which they have not introduced. I really would like the government to move more systematically in the direction of a total reform of the system, because what we are doing now is just addressing the symptoms. We need to do a holistic analysis of what our problems are, and then devise a holistic solution and go overhaul.

How can we use corporate governance to tackle corruption?
The answer is simple! If we follow the principle of corporate governance in the private and public sectors there won’t be corruption or it will be minimised.

Looking at what happened to the failed banks, Oceanic Bank, and Intercontinental Bank, it was in the public domain, and they embezzled peoples’ money.  The Oceanic Bank boss went to court and was convicted, it is not hearsay, and the one of Intercontinental is still on-going but the revelations are in the public domain about private jets being owned by the former Managing Director and being donated to his church among other things. This is a violation of rules of corporate governance because there were rules about who can get loans and what collateral would be required and so on, but all these rules were flouted. The distinction between the person and the official was blurred and lost, because people are greedy and wanted to use the system, take advantage of it for their own benefit. It is the same in the public sector. Previous regime engaged in corruption but they were decent about it, letting the money go into the treasury.

If we apply the rules of corporate governance, corruption would not surface. There are enormous powers that individuals have which we are afraid to challenge them. Corporate governance means there are rules. There are certain things ministers cannot do because it is not their property, an alarm would be raised, blow the whistle, and the system will protect me, not blow the whistle and get five per cent, no! I blow the whistle so that I alert the nation about something going wrong. Even if am not rewarded, at least I should not be punished. But as the system is now, you blow the whistle at your own peril.

How can corporate governance help to build strong institutions that can fight corruption?
Corporate governance is the only way, if we instil the rules of corporate governance in the private and public sectors that is the way to fight corruption. Look at how other countries are run, there are rules, whatever the position you are in an organisation, you are not the owner of that organisation, and you have to separate the personal from the official and everybody knows their rights. If you do something wrong, an alarm would be triggered. In the United Kingdom, they have off state, which is an ombudsman that really monitors what people do, and if there is any complain of conflict of interest or abuse of corporate governance principle, they go in and investigate and issue a report and dish out sanctions. They have the power to actually sanction people whether in the private or the public sector that is apart from the other regulatory agencies. I think if we travel that way, we are more likely to achieve better results. It is better to arrest people who have stolen and put them behind bars but that is not going to kill corruption. We are only addressing the symptoms.

So what would kill corruption?
I think more systemic work is required. First of all, there are organisations where the reward system is clearly inadequate. For example the Police, the reward system is clearly inadequate to take care of the welfare of the officer and the enormous responsibilities put on him. There is temptation.

Part of your objectives is to promote corporate governance, and also to maintain management standards and values, working with government to bring about change. How successful has the Institute been in achieving these?
We haven’t achieved it that is why we are holding this conference focusing on corporate governance. Our code of conduct, if you look and analyse it properly, as a professional manager you would put service above self, and would ever seek and employ more economical and more effective ways of getting things done. It is all about corporate governance that is our principle, we recite it at every of our functions so that we never allow ourselves to forget it, and anybody we train and award membership to is made to subscribe to the rules of corporate governance as written in our code. We keep emphasising that, but I won’t say that we have achieved anything except sensitisation. It is a process and it is something that would take a long time to secure the buy-in of the country as a whole.

Most of the fraudulent activities of public and political officeholders are usually discovered after their exit, can we say that based on the principle of corporate governance, are the metrics for measuring compliance with the principles adequate, and are there sanctions also?
No they are not adequate. The sanctions are there in the law books. If you steal government’s money, you go for some certain years of imprisonment, and very severe but not effective. In this country, we all know that if you steal government’s money and you can hire the best Senior Advocate of Nigeria (SAN) in Lagos, who knows the system, it would be difficult to convict you because they know how to wriggle round the law, but we can get round all that. You can set up special courts; you can sanitise and purge the judiciary, because the raid of the EFCC on the judges’ homes whether it was good, right or wrong, exposed some things going wrong, and I think they just touched the tip of the iceberg because those who are in that industry know that there is more than that going on; a lot of lawyers win their cases by bribing judges. But we used to have judges who have no friends, no social lives whatsoever because that was the profession. Because when they close from work they go home, if they were not in their studies researching their judgment, they would just sit with their families.

What do you think is militating against failure to comply with good corporate governance?       
Well, let me state that the system is corrupt. The Nigerian system is a corrupt system. If you commit a traffic offence, or a minor offence; unless you are not prepared to bribe the policeman, no matter how tough he looks, if you move aside in Abuja, the first thing they do is to open your car, and when they do, that’s occupation, you have to ransom yourself. If they occupy your car, you have to pay to get them out of it, so it is a corrupt system. If you step on big shoes, that is when people get investigated and punished, but in other countries, I will say the United Kingdom, the country I know best after Nigeria, we have all the resources maybe better resources than they do.  For instance, with the bank verification number (BVN), there is nowhere to escape; any movement in any account in which you have direct access or which you operate, will trigger an alarm. People are seeing this but they are not doing anything about it. A lot of civil servants own companies, they operate company bank accounts, they award contracts to those companies, and they are not being caught. But with the BVN, you can trace that.

Looking at the non-compliance of corporate governance between public and private sectors, what do you see?
I will say it is worse in the private sector because, yes there are regulatory agencies but most of the time, the things that happen are under cover, below the raider, they don’t see it. Before something gets so bad in a bank that the Central Bank gets in or the NDIC gets involved, it must be really bad but a lot of little things go wrong. Also, like in the capital market, before something goes wrong that Securities Exchange Commission (SEC) gets in, it’s really bad.  But in government, the regulatory system is actually stronger because at each level people are being monitored by those who are superior to them.

People argue that although it could be more in the private sector, but in terms of volume it is much higher in the public sector?
Yes that may be true, because there is more money in the public sector, and so one man can embezzle so much but I believe that given what we have seen from the banks and the convictions and so on, I think there is more in the private sector, in terms of incidents, not of scale. In the private sector in Nigeria, if you have 1,000 companies probably 900 of them would be private companies, Limited liability companies that are not on the Stock Exchange, and are owned by 10 people or fewer. Most of them are one man show, and corporate governance means little or nothing because you can do what you want. There are due processes you must follow, and there are certain things you can’t just do. For example what our businessmen do, they would come looking for money, they would ask the manager, how much he has made from sales, they would take it and give it to a praise singer, or go and use it to spray at a party or something. That is the violation of the rules of corporate governance. Corporate governance says you can’t touch the money, it is after the end of the year when the accounts have been audited, profit has been declared, dividends issued to shareholders that you can now spend.

Will the code of conduct help the ease of doing business in Nigeria?
Yes of course. When a foreigner comes and wants to invest in a certain sector, and you make him go through 12 different offices, and at each office is a toll gate, if he is not of African descent and doesn’t understands the language, he would leave confused and frustrated taking his money elsewhere. But if he is from this environment and he understands, then he will play ball. I did a consultancy for ECOWAS on equivalent of certificates in West Africa, and it entailed me having to travel to certain African countries in the region to collect data on their educational system. I will go in the evening arrive in the morning to approach some ministries and parastatals with a letter of introduction but was told to come back after two weeks. And there was no guarantee that after two weeks it would be available. I am African, I understand the language and I had to choose between both.

We are in the era of globalisation, how can globalisation enhance corporate governance?
It is a very important factor and it is one good reason why we must conform because we cannot operate in isolation, and have a separate code of corporate governance from the rest of the world. We have to conform to international best practise because it is a global system, and it is getting integrated by the day and that is one more good reason why we must conform to the best practices.

What do you hope to achieve in this year’s management conference?    
If you see the array of speakers and discussants we have invited in the likes of Dr Christopher Kolade, the former High Commissioner to the United Kingdom, and Pro-chancellor of the Pan-African University, and Sheikh Abdullah, a professor of public finance in ABU. There is also, Dr Nat Ofo, who just left as the President of the Institute of Chartered Secretaries and Administration of Nigeria (ICSAN). These are very eminent people whom we think will actually enlighten the participants at the conference and the nation at large about what corporate governance rules are, and how they should be applied. We would find out that after the conference we are nowhere in terms of corporate governance in Nigeria.

What legacy do you hope to leave behind after your tenure?
Well, I have nothing to show in terms of physical structures, I have not built anything or bought a new building, but I think I have reset NIM because NIM was going off-track in terms of the way it is managed. We didn’t have good corporate governance because the president is president and chairman of council; he is the equivalent of the chairman of the board of a company. But here is an office, office of the president before me, some of the past presidents used to come as if they were executive presidents. They would come and stay in the office but there is really nothing to do full time, but if you come in to office, in 30 minutes you would have signed everything they had wanted you to sign. If there are meetings you attend. I live in Kano, I come on the average in a month, once for twice, and the job doesn’t suffer, the rest we do electronically. But before, people will come and stay two weeks, and they will be micro managing interfering with other jobs of principal officers/executives.