Company secretaries meet in Tanzania for governance debate

Hundreds of company secretaries from across Africa and Asia convene in Dar-es-Salaam to forge fresh strategies to address corporate governance issues which have plagued the continent, leading to a number of corporate failures.

In the wake of the global financial crisis, blame has been heaped on an ethical deficit in managing corporations said to have fuelled what has now mutated into the worst global recession in over half a century.

While Africa may have been an innocent bystander as the crisis ravaged developed economies, troubling similarities hinging on greed, corporate governance loopholes and unethical business practices make the continent a ripe spot for future crisis, analysts say.

Delegates from more than 20 countries are expected to convene for the International Federation of Company Secretaries (IFCS) Conference from December 2 to 4th in Tanzania, giving them an opportunity to discuss governance issues in the public and private sectors as well as the challenges posed by the global financial crisis.

“Despite tight regulatory framework, corporate governance continues to weaken in Kenya and Africa as a whole, ” said Sam Ogutha, the president of IFCS.

“Much needs to be done to sort out this mess otherwise we are likely to see more corporate failures and malfunctions in the region, ” said Mr Ogutha.

Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way an institution is directed, administered or controlled.

It is concerned with the relationships between the various stakeholders involved and the goals of the organisation.

The conference, themed Managing Growth in Challenging Times: The Role of Corporate Governance, is expected to consider at length how African countries can stave off future crises through addressing corporate governance issues.

Kenya is currently smarting from the effects of corporate governance lapses in several private organisations with one bank put under statutory management and three stockbrokers closing doors in the last three years.

These businesses, among them Charterhouse Bank and stockbrokerage firms Discount Securities, and Nyaga Stockbrokers, suffered under poor corporate governance.

Currently, the management of the multi-billion shillings Youth Development Fund is in limbo, following disagreements between the agency’s board and the sports minister over the appointment of its chief executive.

Analysts blamed the tussle over Mr Umuro Wario on weak corporate governance structures in Kenyan public institutions which are said to be hurting professionalism and service delivery. And observers are warning of the waning corporate governance practices.

“Poor governance is rife in corporate Kenya which continue to soar under ineffective laws, poor financial sector oversight, a base sector culture and overbearing political and executive corruption,” says the Global Corruption Report 2009.

Delegates from Tanzania, Uganda, Rwanda, Burundi, Nigeria, Algeria, Egypt, Ghana, Malawi, Mauritius, Morocco, South Africa, Zambia, India, Singapore, Malaysia, Bangladesh, Pakistan, Nepal and United Kingdom (UK) are expected at the conference.

The participants will also be seeking to assist a number of African countries form their own National Institutes of Company Secretaries to boost corporate governance.

This, according to Mr Ogutha, will empower them to take control of the development of the profession in their jurisdictions and use this as a tool to enhance good governance.

Mr Ogutha said deliberations of the conference will be shared with government regulatory agencies.