There are many factors that have contributed to banking failure in Nigeria and they range from poor management, failure of governance and internal control systems, corruption, poor Board governance and ineffective banking regulation. The problems are multifaceted. Sometimes, it comes from poor oversight by the board and poor management by senior executives of banks. The most recent one, Heritage Bank’s situation is a peculiar one.
This was a promising Bank that started with some explosive innovations in the system but the problem of the Bank can be attributed to poor management. In my opinion, in selecting leadership of a bank in Nigeria, our regulators need to be more involving, it is not just enough to pass names and credentials for approval, there should be a form of public assessment to enable the investing public air their views about such person. I understand that boards now have Nominations Committee who has the responsibilities for selection of senior management as recommended by the Nigeria Code of Corporate Governance 2018 and CBN Guidelines on Corporate Governance 2023.
The committee should do a bit more than engaging a rigorous selection process, there should be a public presentation and assessment to serve as part of due diligence process for integrity and financial probity. If you look at cases of banking failures between 2004 and date and even more recently using the case of Francis Atuche, the erstwhile CEO of Bank PHB, you will realise that these Bank CEOs had their agenda which were not necessarily in alignment with the objectives of the organisation, they engaged in a lot of unethical practices that sank the banks. A rigorous process providing opportunity of public presentation of such persons could well avert engagement of such persons as leadership of the banks.
