By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Nigeria’s Securities and Exchange Commission (SEC) Thursday advised Pan-Africa Bank, Ecobank Transnational Incorporated (ETI) to appoint a substantive board Chairman who will lead the effort to attain an improved governance climate in the bank.
SEC in a Statement signed by its management and made available to InvestAdvocate gave this advice to the board of ETI following an investigation into the alleged breaches and corporate governance practices within the organisation.
According to SEC, such an appointment should be a result of a credible selection process. ‘’Such a chairman also needs to have the relevant experience and skills to guide this remedial plan. The chairman should have integrity, independence and should not have the potential for conflict of interest in the discharge of the role,’’ SEC said.
Also, the Commission said steps should be taken to ensure that ETI has board members and management team that have the requisite skills and experience to oversee or manage its affairs at this time.
‘’The SEC is certain that the implementation of the recommended remedial plan will eliminate the governance lapses and will further strengthen ETI. The Commission also reiterates its commitment to ensuring the integrity of the market and the protection of the investing public,’’ SEC said.
SEC also advised ETI to hold an Extra- Ordinary General (EGM) Meeting of shareholders to deliberate and pass resolutions on the critical findings and recommendations of the corporate governance audit.
The Commission said the EGM is pertinent in order to address alleged issues of breaches of corporate governance and allegations against the Board of Directors and certain principal officers of the Pan-African Bank.
SEC had in August 2013 commenced an investigation into the alleged breaches and corporate governance practices within ETI in pursuant to its core mandate of fostering the integrity of the Nigerian capital markets and ensuring adequate protection of the investing public. The Commission also engaged KPMG to supplement its efforts and make recommendations on the way forward.
According to the Commission, the gaps identified from the review are the absence of a clear vision and strategy to drive the institution; inadequate transparency in the recruitment procedures and mechanisms for board members and executive staff which fostered conflicts of interest, weaknesses with respect to the tone – at – the – top, governance culture, communication, remuneration for board members and executive level personnel,
Other gaps identified by SEC are decision making, absence of dedicated channels for whistleblowers to report instances of anomaly, and the often compromised autonomy of governance mechanisms such as internal control, and the audit and compliance committee of the board.
SEC investigations shows that the ETI board lacks the ability to manage its own activities; its role in monitoring management and evaluating its performance against defined goals, overseeing the achievement of ethical behaviour in the organisation and responsibility towards shareholders and other stakeholders and accountability for their interest.
The Commission had December 16, 2013 presented the result of the audit exercise to the board of ETI in order to elicit feedback from them. It was agreed at the meeting that such feedback should be made available to the regulator on or before Friday, January 03, 2014 ahead of the audit results being forwarded to the board for dissemination to the bank’s shareholders.
SEC directed that the EGM should be held before the end of February 2014 and expects ETI to develop a one year remedial plan with measures to address the specific governance gaps observed. In the public interest, it will also expect a quarterly report from ETI on progress being made.
