Apparently in our country public office is not supposed to accommodate accomplished professionals and persons of good character and integrity! Another example of this negative hypothesis is Senator Udoma Udo-Udoma’s recent travails as he endures some very uncharitable criticism simply because he accepted the public duty of chairing our Securities and Exchange Commission. Incidentally, Senator Udo-Udoma, the co-founder one of Nigeria’s most successful corporate law firms, Udo Udoma and Bello Osagie, is one of the few professionals who has gotten deeply involved in electoral politics and the national legislature in Nigeria and still has his integrity and reputation intact. Personally I consider him a model of the type of individuals we should encourage to get involved in policy and governance in Nigeria.
Yet it is Udoma who is now been buffeted by criticisms principally from legislators who have not been known to take up the less credible individuals who litter public office in Nigeria. Typical of this pattern of trying to bring down any one who holds himself out as standing for anything worthwhile, it is Senator Udoma who some now attempt to cast in the role of the bad guy. Senator Udo Udoma, in my view is probably one of the best qualified Nigerians to chair the Securities and Exchange Commission, if the criteria for filling that position include professional competence in a field related to Securities and Capital Markets, character and integrity, understanding of public policy issues and laws relating to securities, and independent-mindedness.
He is a partner of a leading corporate law firm with vast experience in Nigerian securities, financial transactions and capital markets; I have not heard anyone question or impugn his character and integrity, in spite of his having been an active player in the rough and tumble of Nigerian politics; he has been a Senator who is familiar with legislative procedure and rule-making; he sits on several important boards including UAC and Unilever; and he is someone who is generally regarded as objective and fair-minded. In any country, he would be an ideal Chair for a Securities and Exchange Commission.
It is necessary in line with this column’s policy that I make some disclosure so that readers can be fully informed. I sit on the board of Chemical and Allied Products Plc, which is a subsidiary of UACN Plc, now chaired by Senator Udoma. I do not however have any personal relationship with him and I do not believe we have ever had any direct personal conversation. We are not friends and have never been mutually involved in any business transactions. I make this disclosure to illustrate the expectation the law and corporate governance has of Senator Udo Udoma. The main ground canvassed by those opposed to his chairmanship of SEC is actual or potential conflict of interest between the SEC position and his UAC Chairmanship. What the law and best practice demands is that he discloses his interest in any matter involving him that come up before SEC and withdraw from decision-making on those matters. Why are the Senate and House Committee Chairs on capital markets seeking to prescribe a higher standard exclusively for Senator Udoma?
A review of global practices on the subject matter will reveal two different models. In the US, the SEC Chairman and Commissioners are executive, full time positions. Indeed S.4a of the US SEC Act 1934 provides that “…no commissioner shall engage in any other business, vocation, or employment than that of serving as commissioner, nor shall any commissioner participate, directly or indirectly, in any stock market operations or transactions of a character subject to regulation by the commission…” This is perfectly understandable since their positions are executive ones. If Senator Udoma were an executive chairman of the Nigerian SEC, he would clearly have to step down from the UAC and other boards. But he is not!
The other model is typified by the UK Financial Services Authority (FSA). Like others have pointed out, several of the non-executive members of the FSA board continue to sit on boards of publicly-quoted companies. Like the Nigerian practice, they would be required to declare their interest and excuse themselves from any matters coming before the FSA for consideration. If the legislature feels better attracted to the US model, of course they may propose legislation to that effect, or amend the current Investment and Securities Act. But they cannot write laws without first enacting them though the due process of law! Thus the hullabaloo over Udoma’s chairmanship of SEC is uncalled for. In my view, it is unlikely that any body who is worthy of appointment as SEC chairman will not sit on any public company boards. If they had to step down upon appointment, we would probably be restricting the pool of potential SEC Chairmen and Board members to neophytes who will not serve the market well.
The additional reason we must discourage the agitation against Udoma is its potential to discourage credible professionals, precisely the type of people we need in such technical positions, from accepting public office.
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