Francis Owusu-Achampong’s thoughts … Applying socio-cultural norms in the corporate governance space – some challenges

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“He who desires to create wealth to benefit his kith and kin should not be undermined”. Typically, in Akan parlance, it is stated unequivocally that “he who attempts to bring honour or wealth into Kotoko (the community) must be applauded, not maligned or hindered.”

Ordinarily, one may construe the above as a laudable derivation from a value system that encourages people in positions of power and influence to be fully supported in their quest to bring fortune and honour to their people.

The problem is the propensity to narrow the definition of “kith and kin” to mean just elements of society with whom one shares similar tribal, social, or religious affiliations as a decision maker to the exclusion of others outside the immediate circle. The broader public interest becomes secondary. Whether the adage frowns on impropriety in the quest to bring wealth into the community   is not clear to this writer.

Another challenge is the unfortunate perception and perhaps, disinterest, in how the wealth was or is acquired. The problem is even accentuated with the contemporary adulation of wealthy people irrespective of the source of their wealth or the absence of consideration for who becomes the victims of a nefarious quest for wealth and associated power.

Whether such quest for power becomes inimical to the aspirations of the larger society or infringes on contemporary notions of equity, sustainability and other cultural values is often relegated to the background.

This and other dilemmas discussed below confronted Kofi Serebour (not his real name), a native of Kwamo in the Ejisu municipality. Kofi was recruited to be the Deputy Managing Director of a multinational bank in Ghana, after responding to an advertisement on the internet. He had been unamused with the subtle and often manifest racism in his previous appointment as a vice- president of a large Wall Street firm in the United States. That was Kofi’s first appointment after earning double doctorate degrees, first in Finance and later in corporate governance.

To say that Kofi was earning substantial incentives would be an understatement. In the corporate space, his intelligence, exploits and ethical disposition clearly marked him out as someone who had potential to head the company even at age 35.

The decision to re-locate to his home country and the acceptance of a relatively lower remuneration package offered in Ghana came as a heavy sacrifice, much to his wife- Exonam’s displeasure. But Kofi was imbued with an unwavering determination to relocate; not only to escape the broader racist tendencies outside of his office, but a genuine, undiluted desire to contribute his quota to the development of Ghana that he left 20 years earlier.

In the first few years of settling into his job, Kofi began to be critical of the credit and procurement practices then prevalent in the organization, plus even blatant breaches of reporting standards to the Central Bank.

To compound his dilemmas, he reports to the managing director who is another Akan in his late 50s, with close connection to royalty in the kingdom.

Following his disagreements with the managing director over creative accounting practices that sought to misrepresent the true financial position of the bank, Kofi was heavily rebuked and told to shut up over his “youthful exuberance and holier than Christ posture”. Indeed he was told in the face that those practices,  though unethical , had been employed over time to keep people from losing their jobs; and if he felt uncomfortable, he could resign.

One fateful evening, lovely Exonam bore the brunt of Kofi’s frustrations when she lovingly asked why he looked so depressed.  Truth be told, theirs was a wonderful union blessed with intelligent and adorable children. In the physical realms, at least, they had everything that promotes happiness.

Several thoughts run through Kofi’s mind as he pondered over the whistle blowing mechanism or whether to resign to avert further frustrations. Reality hit him so hard when he intimated his frustrations to a friend at the Ministry of Finance. In discussions, it became apparent that indeed the entire Ghanaian economy was not big and resilient enough to provide alternative job opportunities. This limited one’s desire to stick to their principles or hop to another establishment to avoid pressures stemming from cognitive dissonance.

The stark reality of “succumb or resign” even worsened his plight as he had to contend with his mortgage which still had several years to run, not to talk about the children’s education and the never-ending requests for financial  assistance from friends and extended family members. Exonam’s  pre-school establishment was just about picking up in Dzorwulu.

The resort to engage in whistle blowing crossed his mind. With his background in corporate governance, he was well positioned to appreciate the nuances of this veritable tool designed to ensure sanity in the corporate space. But he had to evaluate the efficacy of this medium which is reasonably effective in other jurisdictions.  Can he trust the structures and processes to protect him in his twin objective of remedying the rot in the system while maintaining his job?

He had to evaluate his option from a socio-cultural perspective as well. If he succeeded in the whistle blowing attempt, and investigations later proved that indeed there was systemic rot, can he deal with the potential consequences if someone lifted the veil off him? Are there strong institutional frameworks to permanently keep his anonymity?

Succeeding in the attempt might mean the dismissal of the MD and other cronies. It might also involve some structural re-organisation in the bank. What if someone blew his cover and he is subsequently hauled before the traditional authorities to explain why he betrayed a senior kinsman? Would he be able to deal with the perception of being a traitor in the community, or he could count on society to applaud him for saving the imminent collapse of the bank?

In an environment where there is an uncanny tendency to sympathise with the villain, instead of the society which has been victimized, how would friends and relations see him subsequently if it turned out that his actions caused the misfortune of another Kotoko tribesman, perhaps to the delight of executives from other tribes?

Should Kofi adopt the ostrich mentality and become sycophantic while the decay persists?

As he contemplated his options, he was awakened to the onerous obligations imposed on directors by the new Bank of Ghana governance directives and the new Companies Law. There are indeed real consequences of a jail term if a director directly or indirectly causes the collapse of a bank. But Kofi remembered President Obama’s anger when the latter bitterly complained that it was a shame that none of the perpetrators who caused the American financial crises of 2006-2009 was jailed.

Kofi is also aware that in the annals of Ghana’s banking history, no banking executive has been jailed for financial malfeasance or mis-governance, even if this led to the unfortunate truncation of the careers of thousands of staff after a bank collapse and a general loss of confidence in the banking system.

Kofi tried to comfort himself with the fact that in 2008, the Financial Conduct Authority of the United Kingdom levied over GBP18 billion against financial institutions for misconduct of their directors and employees. It dawned on him that even in the UK, none of the individual culprits of these infractions was jailed; at best they were made to resign or pay paltry reparations.  Ultimately, it is shareholders’ funds that suffer depletion from the payment of such fines.

Thus, even if Kofi succeeded in employing the whistle blowing mechanism as a civic duty in getting redress for the loss of shareholders’ funds, it would still appear like a useless victory to him personally. Would he be a hero or a villain, he conjectured.

While contemplating viable options to free his conscience, he remembered one of his senior JHS schoolmate mates who also held the position of Chairman of a fully-owned state-owned bank. In discussions with him, it became apparent that his worries were pervasive in the corporate arena. The issues were even more magnified in the state banking sector where Mr. Mawuko, a holder of FCCA and FCIB and a devout Catholic acted as the Board Chairman of one of such banks. Mr. Mawuko intimated that in some state- owned banks, some executives are constantly torn between the desire to be ethically upright or responding to the dictates of the politicians who appointed them. These dictates may not necessarily be congruent to the mission and vision of the state bank.

The dilemma here is that, the government has a four , or at best an eight year mandate and is always focusing on the prospects of re-election and recouping losses incurred during the election, whereas the Board of the bank is professionally expected to ensure that long term aspirations for the resilience and stability of the bank are upheld against the short term inclinations of the ruling government.

Mr. Mawuko recounted the tight rope that he constantly has to tread between his personal values to build a lasting legacy as opposed to the desires of  politicians  urging him to extend credit facilities  and other favours to mushroom entrepreneurs, traditional rulers and others whose exploits presumably  brought the party into power.

Added to Mr. Mawuko’s challenges are legacy debts owed by previous political office holders who presumed these loans to be “thank you offers” rather than pure commercial loans.  Attempts to recover them are seen as political witch hunting with intention to collapse their businesses or target other tribes perceived to be enemies.

There are also a myriad of administrative issues bordering on ill-conceived recruitment, placement and promotion of party foot soldiers, and sometimes the establishment of bank branches with little or no prospect for growth under the guise of deepening financial inclusion.

Kofi Serebour certainly needs psychotherapy to stay sane at his age. Society expects him to respect age, senior executives and traditional authorities, even when they are definitely wrong. He must labour in a corporate space where honesty, integrity and independent mindsets, as intangible assets as they are, only exist in written Codes of Conduct but are very difficult to uphold in the bid to creating a resilient organizational culture. Cultural expectations that tend to over-emphasise “the end justifies the means rule” need to be critically examined as not all that glitters is gold.

Evidently there are other peculiar African socio-cultural norms that militate against the entrenchment of certain positive  corporate values. These must become part of public discourse and academic research topics.

>>>The writer is a Fellow of the Chartered Institute of Bankers and an adjunct lecturer at the National Banking College, and the Chartered Institute of Bankers, a farmer and the author of “Risk Management in Banking” textbook. Email; [email protected]  Tel. 0244 324181 / /0576436414

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