With the advent of Corporate Governance as a serious indicator of Corporate performance, the need to institute collective decision-making amongst others to enhance productivity became imperative
So things like Board selection and its superiority, tenor limits, separation of roles, clear reporting lines and the rest became a norm
Even with its very positive impact on the sustainability and growth of businesses, Corporate Governance now threw up different kinds of challenges, especially in the finance sector
Corporate Governance had to be quickly instituted with the emergence of owner-managed institutions.
We saw huge personalities holding both chairman and MD/CEO roles and running the institutions like personal fiefdoms
This contributed massively to that first round of bank collapses
As we recovered, authorities now put in place stringent rules aimed at curbing those powers, including the separation of roles and capping approval limits, amongst others
But the most significant blow was the Emir Sanusi tenor limit policy, which wiped out a whole generation of Bank MDs
That afternoon when the policy was announced, Lagos, Nigeria’s commercial capital, went silent like a graveyard cos up to that moment, we were cruising towards life term CEOs in our finance sector
This policy brought up some structure in succession, empowered many more people and exposed leadership to the discipline that is in corporate governance
The Nigerian Capital market has come very late to the party, just announcing its own tenor limits for its SROs just this last year.
But wait, before we begin to gloat. Like everything Nigerian, we must find a way out
Welcome, the Dummy Managing Director.
The dummy Managing Director is that over-ambitious lackey who has served the Owner for years, guarantees loyalty, and is willing and ready to be the eunuch to his master
You know how, in the olden days, slave masters allowed only eunuchs to serve their wives and daughters, knowing how harmless they are to them
That is the exact expectations of a dummy MD in our financial system
As the tenor of the mercurial MD is coming to an end, he selects one of his lackeys and appoints him as the new MD.
Gives him all the vestiges of the office, including huge mortgage loans, which are a golden handcuff, expensive official cars and a rock star lifestyle complete with BUPA medical cover and vacations abroad
All of these with no real power. He cannot make any real decisions. He is just a beautiful fool.
Sitting in front of him and listening to him mouth all the acceptable language of the business, you begin to ask yourself why.
The Banks have perfected this structure, which allows for the tenor limit policy to keep running, but without the transfer of power it was designed to achieve.
All real power is moved to the Holdco, while the cash cow is turned into a subsidiary with the dummy MD in charge, but all serious credit decisions taken at the Holdco level
It is even sadder in the capital market, which brings its own style
Subsidiaries are opened, and a ‘child’ with less than 5 years cognate experience is made MD, but with no real powers
Can’t even sack the cleaner, but he is the MD
Another sad part is that, if there is a problem, the dummy MD takes the heat cos is name is on the SEC register and on all CAC documents
I was once a dummy MD in a subsidiary of a finance house
No real powers, can’t move funds, can’t make investments, and even had to take salary vouchers to the head office for signing
Then the EFCC arrived, and I was taken to the cell. You are the MD, I was told by my chairman, and truly, I was the MD, and I spent four days in the cell
For the capital market SROs, we also see this kind of thing
So people are asking me, ohh Edgar, why are you picking on one guy, he has no powers, everything is done at Holdco
I reply, you see the problem. Why make someone an MD and not empower him to do the work
Why should I not call him out? Is he not the MD? When EFCC came for me, I was the MD, even though I didn’t even know where or what happened to the money
You are the MD of a subsidiary that controls the exchange. Tell me why the market is illiquid.
Don’t look back and say, ‘Are you talking to me?’
You see, the problem with us is that the solutions to our many problems are straightforward and right there before our eyes
If we follow through, the simple corporate governance ethos, we will see that competence will come back, and once that is done, efficiency will come back, and with that, productivity will increase for the betterment of us all
But self-interest, which is short-term in nature, will not let us see the tree from the forest
Both markets – money and capital are beset with this issue – a rash of dummy MDs who are controlled by unseen strings and by powers who are driven by self-interest, and this is why we may not have a market in the next five years.
Go and write it down, that I have said it, that if the issue of Corporate Governance in all of its ramifications esp with titular power and control are not rigidly established, we will not have markets in the next five years. Yes.
Come and really beat me
Thanks
Duke of Shomolu
Last modified: January 9, 2026
