- Post 23 January 2010
- Last Updated on 24 January 2010
- By Kayode Oladele
Corporate Governance and Social Responsibility in Nigeria
By Kayode Oladele
Some decades back, Third world enterprises or companies were posed as corrupt, inefficient and unreliable to do business with. It was stated that Third world firms always found ways to short-circuit the system, evade tax, swindle partners, and engage in sharp practices when it comes to the working class conditionsof service. This claim posed the companies or enterprises of the advanced countries as the ideal, those to emulate. The reality of the 1990s showed that these claims were quite suspect and unsustainable.
Company after company-Enron, WorldCom and all of them- it turned out, were so corrupt and undermined rules bordering on corporate responsibility; the Madoffs came on board and this made total nonsense the claim of honesty, transparency, and accountability by companies in the advanced countries. The culpability of auditing firm came to the glare as it became apparent that most Accounting and Auditing firms that were hired to audit such companies in the countries of the north, merely worked from the answer to the question and not vice versa.
Indeed, some reputable auditing firms such as Arthur Anderson even gave bailout and soft landing to some of their clients/companies that were in crisis! This shows clearly that auditing firms are as corrupt and guilty as those they cover up. It also makes trite of the claim that companies will, or of their volition, behave in responsible ways. This is not true or at least the evidence has shown that it not true. Conclusion: all over the world corporate governance is in crisis and is in search of redemption.
Crisis in Corporate governance is not a result of some chance event; it is the culmination of a skilful network and coalition/alliance between agents of government and powerful elements in the private sector to under the public interest. No amount of laws or rules put in place, that exclude addressing this cabal and mafia-like group will solve the problem of corporate governance crisis. How can this be addressed? It will take understanding the specific profile, case and crisis within each country.
In Nigeria , the private sector has been weak and profiteering rather than profit making had been the abiding faith. Government contracts and rent-seeking behaviour have been core to profiteering. Conditions of service of workers had been weak, because workers had no well defined/well protected social guarantees and social security; workers are underpaid, hired and fired arbitrarily. This has made workers morale low, and made them not to be motivated and, in some cases, they find means to undermine their employers. In relative terms, wages in Nigeria are among the lowest in Africa . Why should this be so when Nigeria is one of the two richest countries on the continent? How then do people survive in Nigeria ? It is unhelpful to talk about Corruption Perception Index (CPI) without factoring these sociological indicators whose threatening effect and impact are so overwhelming.
Until mid 1985, the issue of social responsibility was never a problem in Nigeria as the state, in line with and in the context of the principle of state responsibility to citizens and in light of very robust Development plans, had taken the issue of caring to communities and citizens' needs as state responsibility. For this reason many companies simply went on holiday, they went to sleep not bothering what they needed to give back to the people or community. As a result, companies and corporate groups operating in Nigeria felt a sudden sense of burden when the issue of corporate responsibility emerged in the late 1980s in business practices in Nigeria . There are two arguments against corporate responsibility.
The first is that companies pay tax and as such the government should be able to use the resources so generated to develop or improve the conditions of such communities. The second is that corporate responsibility defined in the context of community and neighbourhood service imply that communities or groups that do not have resources or where companies are not located may not benefit from the services and support of companies in the form of corporate responsibility. This misses the point because the goal of corporate responsibility is to make corporations and companies more socially-sensitive, and more organically connected to the community fro where they produce and make their profit.
Corporate responsibility is meant to give human face rather than the face of money, commodity and market to the community that hosts and supports such companies. Corporate responsibility is another way of showing whether indeed, companies short of saying that human beings and commodities and as such should be treated as objects, demonstrate in their gesture of “giving” rather than always taking.
Corporate social responsibility in Nigeria is too weak; while many companies post super profits they are unwilling to invest in social services such as education, health, roads, security and so on of the community. However, this happens all over the world where the capitalist spirit has full taken roots. The problem in Nigeria is that we always like to copy the wrong things, those things that give us a leeway, an escape route. There is need to mainstream corporate responsibility and begin to get big and medium scale enterprise to understanding that the spirit of generous giving is part of capitalist ethic, strip of this, capitalism becomes a banal and anachronistic economic Darwinism which undermines all peoples and communities.
Capitalism ticks in Europe because there is social welfare and social security. This may sound contradictory or even foolish, but this is the wisdom in the capitalist philosophy-namely that people must not be driven to a point where they rebel and undermine the system. The notion of the welfare state in Europe is said to be cardinal to the ability of workers rebellion to upturn the system. Hence socialist revolution commences not in advanced capitalism but in semi-capitalist states such as Russia and China, and then in agrarian societies like Cuba, Cambodia, Vietnam, Nicaragua, Guyana and so on.
The Corporate Affairs Commission (CAC) can work hands in gloves with other related ministries such as Ministry of Justice, Finance, Environment and Interior to work out an elaborate framework of social responsibility and to align various and sometimes contradictory policies and decisions on the subject matter. This will augur well for the communities and the country. Nigerians need to be better served and they need dignity and honour as citizens. Until Nigerians begin to see such minor issues as the main issues, such sensitive issues as sacrosanct, then we are yet to get to the threshold of competitiveness in the comity of nations.
Essentially, social responsibility is social service, and every corporate group must give social service unconditionally and uncomplainingly. The media must be investigating and non-partisan, teachers, lawyers, doctors and their platforms must all service the people dutifully and diligently, without demanding any thing in return. On the individual level, we can also render social service to each other, to our communities, to interest groups and the less privileged. This is the abiding article of faith that makes western capitalism have meaning, and it is the least we can do to get our people to appreciate both the private and the public sectorsin Nigeria. And until this culture of service is institutionalised and internalised by all, whether as corporate groups or as individuals, we are not likely to make much social impact. Super profits by themselves have no meaning if they do not socially impact on the less privileged. We must always realise that there is a “common good” that needs to be protected. If threatened, the common good, the personal security and safety of companies and the rich, of everybody, is equally threatened. This is the philosophical reorientation that needs to guide our fresh outlook and commitment to the concept of social responsibility.
In so doing, we are restoring dignity and humanity to citizens, we are making them stakeholders. This will inspire patriotism and commitment to the nation state, and it will above all check the social malaise and crisis in the country. To believe that laws, more laws, military and policing can solve our problems is to miss the point. We need to rededicate our selves to the basis of nationhood, why states emerged and how they are sustained in peace and harmony. Nigeria can do with less anxiety and schisms that we currently find all over the place.