CBN Warns Banks against Weak Corporate Governance Practices

The Central Bank of Nigeria (CBN) has reiterated that its adoption of zero-tolerance to lax or weak corporate governance practices has not changed.
The central bank also pointed out that it remained unflinching in its commitment to blocking all avenues in the banking system that wittingly or unwittingly facilitate money-laundering and financing of terrorism in the country. 

Deputy Governor (Financial System Stability), CBN, Dr.Okwu Joseph Nnanna, said this in a keynote address he presented at a training on corporate governance, anti-money laundering and combating of the financing of terrorism for bank directors, that was organised by the Financial Policy and Regulation Department in Lagos, on Monday.

Nnanna, noted that the issue of corporate governance had become topical globally, even as he urged board members to commercial banks present to play their roles more diligently and with due care.

"It shouldn't be return on assets or return on equity that should guide our behavior. What we are saying is that we should do banking the old-fashion way, where our words would always be our bond. And in the area of corporate governance, we at the CBN have seen some lapses which could have been corrected before they degenerate. Let me also put bit on record that we have no intention of making banks a revenue centre for the central bank," he added.

The deputy CBN governor described money laundering and the financing of terrorism as financial crimes, saying they have disastrous economic effects. He also stressed that there is an interface between weak corporate governance and money laundering/ financing of terrorism.

"It will not be wrong if one considers them as mutually reinforcing since weak corporate governance can be compromised by vendors of money laundering and terrorism and vice versa," he added.

On his part, former Managing Director of Acess Bank Plc, Mr. Aigboje Aig-Imoukhuede, who was the chairman at the event, urged the board members present to always ensure that their character and leadership values dictate how they deal with issues.

"A board that does not seek experts' independent advicein taking decisions can't be serious. It doesn't mean you choose your own advice, it means that on key decisions in a company, for example what technology to buy. Ensure that as your management is recommending technology, an independent person is brought in to endorse that recommendation. If your management is going to do a merger transaction, have experts tell you if it makes sense to go that way," he added.