BY OSA AMADI
Reading Dr. Grant Onokurefe Akata’s Corporate Governance: An emerging economy perspective published 2017 by University Press Plc., is almost like attending the Harvard Business School. What is corporate governance? Akata, citing Heyden (2010) says it is the “thinking, discussing, and decision-making…about the future of a business…about how the power and resources of the organization are harnessed and deployed in the process of value creation for stakeholders, while respecting the legal obligations of the nation or broadly the environment where the business operates.”
Good corporate governance is to the economy of a country, what blood is to the human body. A state fails or succeeds depending on the corporate culture of companies that operate in that state. This becomes truer when the broader issues of leadership are linked to this theme of corporate governance as the author has done. Grant Akata’s book, rich in local content, couldn’t have been published at a better time in Nigeria than now when the country is grappling with the problem of corruption, both in the public and private sector. As the author wrote in the preface, it is a book “written to provide a simple but clear discourse on the entire spectrum of corporate governance theory and practice in Nigeria.”
This exquisitely made 329-page book is divided into sixteen chapters. The first chapter gave the definition and conceptual clarifications of corporate governance, while chapter 2 and 3 treat the theories of corporate governance and corporate governance practice in emerging economies respectively. Other chapters deal with board of directors, board of committees, company directors: legal duties and liabilities, stakeholders and markets.
From chapter 8-16 the author takes the reader on the Internal workings of the board and measuring corporate governance, risk management and corporate governance, the role of audit in corporate governance, ethics in corporate governance, corporate governance in other sectors, leadership in corporate governance, global concern for corporate governance: curbing corruption, accountability and reporting, and the future of corporate governance.
Discussing the need for effective corporate governance in organizations, the author writes on page 3: “If the rules and regulations of an organisation are duly complied with, such an organization will deliver much more consistently over a long tenure on the goals for which it was conceived and established.” This is a point that needs to be stressed in every discussion about corporate governance. The key phrase here is “if the rules and regulations are duly complied with….” The problem is not in the making of the rules and codes but in the obeying of the rules. People always find ways of circumventing the rules.
When the author wrote on page 4 that “governance as a concept… should be independent from management…” the question that comes to mind is: who exercises governance? Grant provides the answer on page 5 where he discussed corporate governance versus corporate management, saying the two are two sides of the same coin. “While corporate governance focuses on the ‘processes, structures and relationships through which the board of directors oversees what the executives do, corporate management is focused on defining and achieving the objectives of the company as approved by the board of directors.” So from here, we learn that corporate governance is the duty of the board of directors.
The relevance of corporate governance in Nigeria
This section reveals that in writing this book, Dr. Grant Onokurefe Akata has his country, Nigeria, in mind, and the reader, after reading this part, cannot but be convinced that if we adopt the ideas he made available to us in this book, soon, we would sing a song of victory.
Dr. Akata did not try to be nice by hiding our problems. After acknowledging Nigeria’s huge potentials for future rapid economic and industrial growth, Grant, like a surgeon, went straight to the ailing organ of Nigeria’s economy with his surgical blade: “In spite of IMF’s projected annual economic growth rate put at about 7% (already sliding to negative) and its strategic geo-political position in the African continent, facts of terrorism, religious bigotry and unduly expensive democracy, the nation’s economy and its practices, including corporate governance lie prostrate…Nigeria’s governance process is an area where it needs support…”
In chapter 3, after ex-raying corporate governance practices in emerging economies, Dr. Akata on page 47, locates where Nigeria’s corporate governance practice fits in the continuum.
Theories of corporate governance
This chapter will be most useful to scholars of business and economics, though it should also be of interest to all practically oriented readers, given the fact that practice has its base in theory. The theories of corporate governance discussed here are stewardship theory, the agency theory, the stakeholders’ theory, and the transaction theory. This illuminating chapter closes with discussion on “working with stakeholders”.
The chapter on board of directors is lucid, which dovetails into a valuable analysis of why boards fail. From there the author goes on to the related issue of board committees of which the risk management committee is one. However, risk management is discussed broadly in chapter 9 under “risk management and corporate governance”.
Among the discourses on the chapter dealing with company directors: legal duties and liabilities, are the appointment of directors and their conditions of service; the principal responsibilities of the Chairman (described as the Chief Governance Officer); the CEO and the company secretary, amongst others.
Nigeria resurfaces in chapter 14 under the theme, Global concern for corporate governance: curbing corruption. After looking at other climes in relation to this issue, the author broaches a question on page 283: “how has Nigeria faired?” and then submits that “neither the globe nor emerging countries like Nigeria has achieved any appreciable measure of success. The human being with technology is becoming increasingly more sophisticated in contravention of laws, regulations and codes. The inherent human nature to cut corners and seek advantage willfully at the expense of others has made the regime of legislations unable to keep pace with devices which beat decent conduct and probity.”
But that statement does not translate to admittance of hopelessness, for the author provides corruption prevention guiding principles on page 287.
It would be ridiculous to think that all the wisdom deposited in this 329-page compendium on corporate governance would be captured in a newspaper review of the book. Corporate Governance: An emerging economy perspective is a collectors’ item for those who know the eternal value of good books. Whenever I run into such books in bookshops, I buy many copies: one for my bookshelf, one for my vault, and the rest as priced gifts to loved ones who know the value of good books. I urge you to do same with this particular book. It’s simply a treasure.