Okereke-Onyiuke Condemns CBN’s Call for Independent Directors
 10th OCT 2006

Dr. (Mrs.) Ndi Okereke-Onyiuke, Director General of the Nigerian Stock Exchange (NSE) has flayed the Central Bank of Nigeria on its demand for the provision of independent directors on the board of banks in the country.

“It is important that those who have substantial shares in a bank be allowed to sit on the board of such banks. I see no need for any independent directors on the board of banks”, Okereke-Onyiuke said in Lagos on last week.

The Director General, who was answering a question at the Fact Behind the Offer of the Intercontinental Bank on the floor of the Nigerian Stock Exchange in Lagos, said the step by the CBN might be counterproductive for banks.

Okereke-Onyiuke, who was speaking against the background of the demand by the CBN that independent directors be appointed by banks to safeguard the interest of other shareholders, said the non-executive directors on the board were already performing that function.

“If there are already four non-executive directors on the board of a bank, what do you need independent directors for? Since they are not part of the management they are representing the body of shareholders.”

She added that it was very important that those who made the board of directors of banks be those with substantial shareholding so that they would be compelled to work for the continual progress of the bank.

Citing the example of NITEL, Okereke-Onyiuke said the former managers, Pentascope, paid N2 billion for an office in Abuja for just one year. “Now, let us look at it from this angle, would those people have paid that much money for an office if they were the owners of the company? Would they have spent their own money like that? That is the issue. We should be careful how we go about things so that we do not kill the interest we are trying to protect.”

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