Un-reconstituted boards threaten capital market, economy – Experts

Some financial experts in Lagos yesterday decried the Federal Government’s delay in constituting new boards for regulators of financial institutions.

They told newsmen in recent interviews that the delay was negatively affecting investors’ confidence in the capital market and the general economy.

President Muhammadu Buhari on July 16, 2015, sacked Mr Peter Obi, Chairman of the Board of the Securities and Exchange Commission (SEC), and some other board chairmen and members.

Prof. Sheriffadeen Tella of the Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun State, said that the board of any organisation played the role of formulating and approving policy measures for implementation by the managers of such an organisation.

“Absence of the board means a big lacuna, as the organisation can become inefficient and ineffective, operating on static rules and regulations.

“Financial activities take place in a dynamic environment that requires rapidly evolving rules and regulations.

“Thus, the absence of boards for regulators of financial institutions such as SEC, NDIC (Nigeria Deposit Insurance Corporation), and NAICOM (National Insurance Commission) cannot augur well for the proper functioning of these institutions,” he said.

The professor said that the absence of their boards of directors might be the reason for noticeable inefficiency in some of the organisations in recent times.

“Whenever the government has no immediate replacement for a board, it should not dissolve the existing one.

“If a board is not necessary, it would not have been part of the arrangement of organisations globally,’’ Tella stated.

Dr Uche Uwaleke, the Head of Banking and Finance Department, Nasarawa State University, Keffi, said that the delay was slowing down economic activities.

Uwaleke noted that certain decisions and approvals in an organisation could only be taken by its board of directors, saying that such decisions or approvals would remain pending until the constitution of the board.

“This is often the case with the recruitment of top staff members into these agencies, or whenever there is the need to approve an expenditure beyond the approval limit of the chief executive,’’ he said.

Mallam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., said that the delayed constitution reducing investors’ confidence in the market, with over 144 cases pending at the Investment and Securities Tribunal (IST).

He said that no case had been treated by IST since June 2016.