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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) (A company listed on the Nigerian Stock Exchange), the Securities and Exchange Commission (“SEC” or “the 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.

The 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; governance culture, communication, remuneration for Board members and executive level personnel, decision making, absence of dedicated channels for whistleblowers 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.   The Board specific weaknesses include

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


Sequel to the findings of the audit, SEC held a meeting with members of the Board of ETI on Monday, 16th December, 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, 3rd January, 2014 ahead of the audit results being forwarded to ETI for dissemination to the bank’s shareholders.

The 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.  The SEC further advises that the EGM should be held before the end of February 2014.

The SEC expects ETI to develop a one year remedial plan with specific measures to address the specific governance gaps observed.  In the public interest, it will also expect a quarterly report from ETI 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.

The SEC is certain that the implementation of the recommended remedial plan will eliminate the governance lapses and will further strengthen ETI. The Commission also reiterates its commitment to ensuring the integrity of the market and the protection of the investing public.

"It is important to emphasize that the Corporate Governance Audit is being done at the level of the ETI Holding Company and does not reflect governance at any of ETI's banking subsidiaries that are responsible to the banking and market regulators in the countries in which they operate."