The commission also accused the board of inadequate transparency in the recruitment procedures and mechanisms for Board members and executive staff, the situation which it says fostered conflicts of interest, weaknesses and absence of dedicated channels for whistle blowers to report instances of anomaly.

The commission, in a statement issued on Thursday, said that it investigated series of alleged breaches and corporate governance practices levelled against the Board of Directors and certain principal officers of the bank and identified series of inadequacies and gaps which deserved to be critically addressed by the bank.

“Following a series of publications in the local and international media regarding breaches of corporate governance and allegations against the Board of Directors and certain principal officers of Ecobank Transnational Incorporated (ETI), the Securities and Exchange Commission, pursuant to its core mandate of fostering the integrity of the Nigerian capital markets and ensuring adequate protection of the investing public, commenced an investigation into the alleged breaches and corporate governance practices within ETI in August 2013. The Commission also engaged KPMG to supplement its efforts and make recommendations on the way forward,” it said.

The commission said that gaps identified from the review are the absence of a clear vision and strategy to drive the institution; inadequate transparency in the recruitment procedures and mechanisms for Board members and executive staff which fostered conflicts of interest, weaknesses with respect to the tone – at – the – top.

Others include governance culture, communication, remuneration for Board members and executive level personnel, decision making, absence of dedicated channels for whistle blowers to report instances of anomaly, and the often compromised autonomy of governance mechanisms such as Internal Control, and the Audit and Compliance Committee of the Board.

SEC itemized ETI Board’s specific weaknesses to include its ability to manage its own activities; its role in monitoring management and evaluating its performance against defined goals; overseeing the achievement of ethical behaviour in the organisation; and responsibility towards shareholders and other stakeholders and accountability for their interest.

The commission stated that sequel to the findings of the audit, it held a meeting with members of the Board of ETI on Monday, December 16, 2013 during which the results of the exercise were presented in order to elicit feedback from them. “It was agreed at the meeting that such feedback should be made available to the regulator on or before Friday, 3^rd January, 2014 ahead of the audit results being forwarded to ETI for dissemination to the bank’s shareholders,” it said.

Flowing from this, SEC has now advised ETI that the findings constitute an important basis for convening an Extra – Ordinary General Meeting (EGM) of shareholders to deliberate and pass resolutions on the critical findings and recommendations of the corporate governance audit.

SEC says it expects ETI to develop a one year remedial plan with specific measures to address the specific governance gaps observed and submit a quarterly report on progress being made.

The commission believes that ETI will need to appoint a substantive Board Chairman who will lead the effort to attain an improved governance climate.  “It will be important that such an appointment is the result of a credible selection process.  Such a Chairman also needs to have the relevant experience and skills to guide this remedial plan.

“The Chairman should have integrity, independence and should not have the potential for conflict of interest in the discharge of the role.  Steps should also commence to ensure that ETI has Board members and a Management team that have the requisite skills and experience to oversee or manage the affairs of ETI at this time,” it said.

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