Why Former Regulators Can Be Assets, Not Liabilities, On Company Boards

The recent conversations about the propriety of appointing former government regulators as board members of companies within the same sector call for enlightenment. While MTN Nigeria is in the spotlight at the moment, an intervention helps to shed light on a practice considered standard not only in Nigeria but also worldwide.

The composition of a company’s board of directors is crucial, serving as the guiding force behind organizational objectives. A company’s articles of incorporation and corporate bylaws determine the structure and powers of the board. The board operates as a fiduciary on behalf of the company and its shareholders, providing insight, advice, and leadership for important decisions. Therefore, it is essential to have highly competent individuals with both private and public sector experience.

Assessing the legality of a former regulator joining a company’s board necessitates a thorough examination, beginning with an understanding of the concept of the ‘revolving door’. This term, as defined by Transparency International, refers to the movement of individuals from government to the private sector and vice versa. Consequently, there is a cool-off period, during which an ex-public official must wait before seeking engagement in a private organization; the duration of this period varies according to jurisdictions.

For instance, while Norway imposes a cool-off period of six months, it is two years in Cyprus. The Central Bank of Nigeria (CBN) typically enforces a two-year cool-off period. However, in the case of the Nigerian Communications Commission (NCC), there is no provision for such a cool-off period. It is reasonable to assume that the law expects individuals in this scenario to continue productively contributing to society.

Moving beyond legality, the ethical dimension is equally important. In Nigeria, companies often grapple with regulatory compliance challenges. In this context, a former regulator brings valuable expertise to a company’s board. Who better to advise on ethical conduct and tax compliance than someone with firsthand regulatory experience?

Furthermore, it is considered best practice for companies, both in Nigeria and abroad, to include former government officials on their boards. This ensures compliance and aligns with the imperative of engaging nationals at the highest management levels.

Flutterwave, a leading payments technology company, recently appointed Dipo Fatokun, a former CBN director, as Board Chairman, citing a commitment to maintaining the highest regulatory and operational standards.

Looking at the USA, Linda B. Bammann, a former Federal Reserve Board Governor, served on JPMorgan Chase’s board from 2004 to 2013. William E. Kennard served as the chairman of the Federal Communications Commission (FCC) in the United States from 1997 to 2001. After his tenure at the FCC, he joined the board of directors of Sprint Corporation (now part of T-Mobile US).

Also, Mary L. Schapiro served as the chairwoman of the U.S. Securities and Exchange Commission (SEC) from 2009 to 2012. Following her time at the SEC, she joined the board of directors of General Electric Company and Morgan Stanley. Suffice it to add that these examples were cases where the regulators, after their time in public service, joined the boards of companies within the sectors they regulated.

In light of recent calls (albeit unknown intentions) to investigate MTN Nigeria for appointing former regulators to its board, including Dr. Ernest Ndukwe, the current Board Chairman of MTN Nigeria and former Executive Vice Chairman (CEO) of the NCC; let’s narrow the scope to data. He served as the Chief Executive Officer of the NCC from 2000 to 2010. He was appointed to the MTN Nigeria board on June 1, 2018. Although there was an eight-year cool-off period, he did not have to wait that long. His appointment to the company is paying off today as MTNN has the highest governance standards amongst publicly-listed companies in Nigeria.

Under Dr. Ndukwe, the company continues to commit to supporting Nigerian society through the MTN Nigeria Foundation. In 2023 alone, it committed N1.7 billion to corporate social investment programmes on youth development and national priority programmes.

On the MTN board also is Dr. Omobola Johnson, who began her career in 1985 at Arthur Andersen & Co/ Andersen Consulting and Accenture where she became Country Managing Director in 2005. She had piled 25 years of solid experience before she went into public service as Nigeria’s Minister of Communication.

Another remarkable addition to the MTN board is Ifueko Omoigui-Okauru. With experience in Audit, Tax and Consulting work at the firm of Arthur Andersen & Co. (now split into three firms – KPMG Professional Services, Verraki and Andersen Tax), she founded ReStral Ltd. (a Leadership and Management Services Company) in 1996 and built the organisation up from a zero base to a company par excellence. She became the first female Executive Chairman of the Federal Inland Revenue Service of Nigeria.

It’s clear that the MTN board of directors includes several former regulators, but what’s the fuss about? The real concern lies in whether the company receives preferential treatment. In the telecoms sector, MTN stands out for paying the highest amount of taxes. In 2022 alone, it contributed a staggering N326 billion in taxes to Nigeria, and to date, has paid close to 4 trillion Naira in taxes and levies to government at all levels.

While there are exceptional people with private and public sector experience on the MTN board, there is also a group of astute professionals with only private sector experience. One such individual is Michael Onochie Ajukwu with over 21 years of experience in the banking industry and an extensive understanding of the Nigerian Political Economy with a special focus on Energy, Real Estate and Adolescent Education.

Modupe Kadri, also on the board as an Executive Director, previously worked at Lafarge Africa PLC where he held various positions in the West African Portland Cement (WAPCO) PLC subsidiary, including financial controller and business development manager. He trained and qualified as a chartered accountant with PricewaterhouseCoopers (PwC), spending 11 years before joining MTN Nigeria in 2007 as the General Manager of Financial Operations and held various positions within the finance division.

The MTN Nigeria board is replete with diverse personalities with complementary backgrounds in various divisions within the private and public sectors. Little wonder the corporate governance standards of the company are at a towering height, ensuring viability for its critical stakeholders.

MTN Nigeria should be lauded, not vilified, for including Nigerians at the highest levels of management in its structure. There is a pressing need for education on organizational dynamics within the business sphere. It is paradoxical that, despite Nigeria’s urgent need for increased commercial activity, certain narratives persist in the social and media spheres.

In conclusion, Nigerian companies should learn from MTN and prioritise the inclusion of qualified nationals at the highest levels of management. While there is a sufficient number of qualified private sector players, former government officials possess invaluable expertise that can enhance corporate governance and drive business success. Their governmental background should be viewed as an asset, not a liability.