October 05, 2015 3573 VIEWS

Monday, October 05, 2015 2:30 PM / Gbenga Ogunsakin / CMR

Governance Ethics: A Perfect Action or Perfect Person? Understanding the science of Corporate Governance

“I bear no ill-will against anyone on past events. Nobody should fear anything from me. We are not after anyone. People should only fear the consequences of their actions.” - President Muhammadu Buhari 

Moon-walking was a novelty to the baby-boomers’ generation. Now just before that generation expires their grand-children are practically living on i-clouds in the streets with ears plugged, chit-chatting, seeing blank and drifting just like zombies unaware of their entire surroundings. It is the return of nirvana in the cyber form, and probably runs in the family. In the sixties while fighting off junkies John F. Kennedy was simultaneously promising Americans we shall soon land on the moon! They did. It was all so surreal, about science, arts, junkies and the heavenly experience all happening together. Now after half a century the revolution is back again.

It was also the age of MANAGEMENT, sired from the ribs of Business like the creation story in Genesis. Only this time the god was Peter Drucker. And like a god he closed his eye-lids at the end of that century to enter apotheosis but not without a prophecy: that 21st century would usher in a new testament of Management, and its gospel would be in the mouths of a new generation of disciples, forming “a society of knowledge” and practically dispensing virtues, not mere professing of a theory of the ethics of business, in other words doing INTEGRITY.

He said, “Knowledge is not impersonal, like money. Knowledge does not reside in a book, a databank, a software program; they contain only information. Knowledge is always embodied in a person; carried by a person; created, augmented, or improved by a person; taught by a person; used or misused by a person. The shift to the knowledge society therefore puts the person in the center. In so doing, it raises new challenges, new issues, new and quite unprecedented questions, about the knowledge society’s representatives, the educated person”. (Peter Drucker). Are you?

Take the social media for now, it tastes like a return to the olden art of speech-making or public speaking. The end of the ITC explosion is to adumbrate the global village. Blogging, tweeting, et al, is unwitting return to the village square. Only difference is that this version promotes the lazy thoughts and lousy talk, in one word improfoundity. Hip-hop is not exactly the poetry of Frost or Bob-Marley. Theirs aforetime was built on an earlier foundation of the classics. Today’s is irreverent non-invention, but happening at exactly when mankind arrives on his dizzying moment of innovation, already being accepted as the re-invention (of the wheel!) once thought impossible. It is a paradox.

Meanwhile, it is the micro environment that will suffer the more consequences, from a cascade of the global socio-economic slow-down. Measured last week in Nigeria for instance, Atedo Peterside gave a peek of his summation on the capital market, whether revised on his Jonathanian version or not. But the truth is that suddenly the nation’s econometrics is flustered. And a burgeoning school of spin masters will not let up. It is darn hair-splitting to distinguish the nonsense from real sense and still stay on course, because the palate of consumers itself is confused and the proselyte could end up as one arrested for debauchery and mobbed. Here the fate of Socrates and Galileo Galilei is instructive for advice. But thank God there is actually a valid science for this discourse, Corporate Governance is the new incarnation for all that Management ever asked, from the public, private and even cyber sectors!

Welcome to the Gatekeepers
To start with, just about how much do people really know about Corporate Governance? That is, apart from the CAMA in Nigeria and the various Articles of Association for respective companies, some gleaned from the daily accounts of business on the floor of the Stocks Exchange. Or other times when a bank erupts in a scandal and there is someone appointed to receive its carcass while EFCC ramps the officers up? Or there is a coming together of bodies under any aegis to discuss the all-important “Code of Corporate Governance”, etc. But then is that all?

There must be something wholly wrong about a woolly impression being created by Corporate Governance in the minds of the people both among and outside its circle of end-users. It does not even boast a certified definition like for instance an Economics or Physics or even Literature! Although this is not a peculiar Nigerian problem, it is a universal predicament, as The London Economist commented knowingly in October, 2010, “The world knows less about Corporate Governance than it likes to think.” So short of a grandstand by most aficionados who like to profess it, there is probably just as much bluff about the amount of real corporate governance resident in town, all geared towards maintaining the status quo of the global ailing economy.

But there is indeed a science of Corporate Governance and there are its scholars, although materials on its study are scarce at the moment being a new course. Also it may not appear on the list of courses for students at the first degree level in a university, as a matter of fact its baseline requirement may be MBA+ (plus experience). These perhaps should give its willing audience an idea. However its lingo is fashionable on the lips of CEOs, Directors and top Managers of the Public and Private sector, making one to ask, is it an elites concern?

Institution and Authority
The academia and the media are two rear institutions that readily follow the process of change in the society a task which the TIME magazine also summed up in October, 2010, upon its review of the first decade of the 21st century. TIME noted it was becoming difficult to track the trends, particularly against the activity of certain systemic resistors within the academia and the media because, as the magazine put it, “we are living a world of reality customized by ideology.” Consequently she tagged those resistors as “the gatekeepers” and railed against their negative phenomenon “they must hand over the keys!” it crowed.

According to Robert Monks and Nell Minow, two front-liners who early strove to put the subject on the reading table (2004), “Good Corporate Governance requires a complex system of checks and balances. One might say that it takes a village to make it work. In the last decade we have seen a perfect storm of failures, negligence and corruption in every single category of principal and gatekeeper: managers, directors, shareholders, securities analysts, lawyers, accountants, compensation consultants, investment bankers, journalists and politicians”.

If anything the two great writers simply hinted at the underwhelming returns from a one-subject approach to either comprehend or to codify a science for Corporate Governance. After many centuries the option of multi-disciplinarity surfaces again (since the Humanities) to reconnect the frags and splinters of knowledge where they had fallen in the life-time of the academia. In tandem to the spiral turns of many civilizations, and perfectly agreed to the emerging template of Innovation and the Disruptive technology. This civilization will “re-invent the wheel” to have its way.

Change and Corporate Governance however have an oblique relationship to each other. Change is dynamics while corporate governance stabilizes. More pertinently, the resistors or gatekeepers referred here concern two important things: one, the generic concept of change which was already situating in a new level of dialectics by the turn of the millennium; two, there is simultaneously a new term evolving in the attempt to remake the environment of Capitalism today, called “Marketology”.

Marketology is inherent force in the global market that tends to create a perspective of power and direction whenever in transaction mode. Its expanded definition assumes that often certain inducements are necessary to smother that process of exchange, in order to ensure that the market environment is not simply reduced to bare mercantile interests. This latter connects the market to the humanity of man, or terminologically speaking, Democracy.

Now what’s the sum of all above?
The market is in a flux, the subject is a maze and the people are still dazed. The Gatekeepers’ timely intervention will have to profile the three and re-connect them in one whole then unleash the dynamic for healthy growth. It will draw attention to certain false starts in the conception of the subject of Corporate Governance in order to rid it of myths about being difficult, not excluding the sociology of the early writers too, as a crucial part of the evolution of the subject, because their attempt that failed to match an answer to the evils of capitalism left a precipitate problem that must not be left un-addressed.

Whatever may have happened, whether in the cognitive attempts of the writer or any other impeding variables, it is important to realize that Corporate Governance cannot remain a course that defies thinking-through, not at least by what was preached by the 20th century gurus of Management: Peter Drucker, Stephen Covey, et al. If Corporate Governance conjures such a pinpoint applicability to most issues of the late 20th and early 21st centuries, then the urgent question for the academia will be to make it such an easy subject that is accessible to everyone.

Corporate Governance conjoins Leadership and Management, the two top problems in the world today as its purview and about which she alone seems to retain the key to resolve their conundrum. Above will only make meaning if they dovetail into an ideal curriculum for Corporate Governance in the Business Schools, and that should ramify all the windows mentioned so far.

The Gatekeepers’ Intervention
At least now we know that Corporate Governance is a template for the comparison of many systems that underlie the running of organization (or nation), hence a guide for making its leader take a perfect decision. Such a perfect decision will be a sincere act taken in accordance to the guiding rules and one that is beneficial to all the stakeholders having respect to equity. Acting thus perfectively is taken as a hallmark of integrity for both the individual and the system.

Ethics here is not yet about the perfect person, to single out the individual for expectations of his titular leadership, different from systems integrity (a necessary distinction that needs to be made under the new curriculum), but rather playing by the intent or goal desired, one can always have a perfect decision. This seems to be a tip of the dilemma presently in Nigeria with the crises of the leadership personalities against purpose. And President Buhari may have scored the bull’s eye by his summation of the scenario saying, “We are not after anyone. People should only fear the consequences of their actions.”

Responsibility means “to stand in nexus between cause and effect”. And here is the crux of the new matter about corporate governance not resting on its start-up “core concepts” that loves to discuss Board and governance structure, trust and excessive confidence in decision-making. This is probably based on the template of an Industrial setting of the 1930s. The millennium has caged all of that. There is a new approach, based on the idea of a tooled-individual and his shared commitments.

Accordingly Peter Drucker projected,‪ “The knowledge society requires a unifying force. It requires a leadership group, which can focus local, particular, separate traditions on a common and shared commitment to values, a common concept of excellence, and on mutual respect”.


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