Corporate governance and Baron de Montesquieu
I traced the root of corporate governance to the theory proposed by Montesquieu. The doctrine of separation of power to me is the root of everything that is corporate governance.
To this end, corporate governance is not new. Montesquieu laid down this doctrine with a view of ‘sharing’ power by the three arms of government via Legislative , Executive and judiciary. The root meaning of corporate governance is share.
He postulated that if the three powers enumerated are glued in one hand the result would be tyranny, oppression, and annihilation.
He further said the effect, is that life will be brutish and shortish and everything will be reduced to the survival of the fittest. He spoke pointedly about the necessity of check and balance.
Harvard Business review had maintained that although corporate governance is a hot topic in boardrooms today, it is a relatively new field of study.
Its roots can be traced back to the seminal work of Adolf Berle and Gardiner Means in the 1930s, but the field as we now know it emerged only in the 1970s. I strongly disagree with this.
Corporate governance is to ensure that no one arrogates power to him or herself undeservedly. It ensures that institutions are governed and controlled with check and balance in place to prevent human callousness, voracity and greediness.
The essence of good corporate governance is ensuring trustworthy relations between the corporation and its stakeholders. Therefore, good governance involves a lot more than compliance.
Good corporate governance is a culture and a climate of Consistency, Responsibility, Accountability, Fairness, Transparency, and Effectiveness that is Deployed throughout the organisation (the ‘CRAFTED’ principles of governance).
Trust is the foundation of sustainable development. Why is it that we do not have organization that is 100 year in our country?
The progenitors of these companies find it difficult to trust anyone to hand it over to before their demise. Thus almost all our companies go to burial ground with their owners.
In some cases they hand over to their children and wife whose interest lies elsewhere.
As the world continues to get smaller, our mutual interdependence increases and we all need to be able to mobilise the resources and goodwill of others to achieve success. That can only be achieved through gaining their trust.
Therefore, the ability to gain the trust of other and of all the stakeholders in the value chain is becoming the key to success.
What do we have today? The same problem Montesquieu tried to prevent about 300 years ago still bedevil us. We have noticed with acute dismay where the executives pocket the legislators and judiciary.
These two arms were so handicapped that they have to go cap in the hand to the executive for them to be able to function at all. Corruption reigns supreme from garage to the villa, because there is no check and balance.
I am of the opinion that it’s a waste of time to fight corruption. EFCC and ICPC is needless.
The best any nation could do is to prevent corruption, greed and graft, by instituting check and balance with digital means available today rather than fighting it.
It was in the news recently how the President of the Institute of Directors, UK Barbara Judge, was made to face the panel for a 41-count charge bothering on bully, assault, derogatory statements, sexist and racial comments.
She was said to have said that there is a department in IoD UK that you have pregnant woman and a black man, that how do you expect such department to perform? She has been made to resign.
I must quickly riposte that what she has done is nothing as compared to many atrocities that been carried out by office holders in our country, even a million times and no one ever face any panel or asked to resign.
At the national level, we just heard what the legislators are earning. A nation that spends 80 per cent of its earning to feed legislators is doomed.
Professors are earning less than N300,000 and some half-baked, barely literate so called law breakers that people call lawmakers would be carting home over 30 million every month.
There is no cancer that is more cancerous than this. The more the place becomes unattractive to miscreants the better for all of us.
Governors collect allocation for states without having to give account of trillion of Naira they have collected from the national purse.
No tragedy is worse than the tragic of unaccountable public office holders. Where there is no accountability, people perish.
Charles-Louis de Secondat, Baron de La Brède et de Montesquieu, was born on January 19, 1689, at La Brède, near Bordeaux, to a noble and prosperous family.
He was educated at the Oratorian Collège de Juilly, received a law degree from the University of Bordeaux in 1708, and went to Paris to continue his legal studies.
On the death of his father in 1713 he returned to La Brède to manage the estates he inherited, and in 1715 he married Jeanne de Lartigue, a practicing Protestant, with whom he had three children
In 1716 he inherited from his uncle the title Baron de La Brède et de Montesquieu and the office of Président à Mortier in the Parlement of Bordeaux, which was at the time chiefly a judicial and administrative body.
For the next eleven years he presided over the Tournelle, the Parlement's criminal division, in which capacity he heard legal proceedings, supervised prisons, and administered various punishments including torture.
During this time he was also active in the Academy of Bordeaux, where he kept abreast of scientific developments, and gave papers on topics ranging from the causes of echoes to the motives that should lead us to pursue the sciences.
Montesquieu writes that "the principle of despotic government is subject to a continual corruption, because it is even in its nature corrupt" This is true in several senses. What is this if not conjecture of corporate governance? First, despotic governments undermine themselves
If it is to provide its citizens with the greatest possible liberty, a government must have certain features. First, since "constant experience shows us that every man invested with power is apt to abuse it ... it is necessary from the very nature of things that power should be a check to power" This is achieved through the separation of the executive, legislative, and judicial powers of government.
If different persons or bodies exercise these powers, then each can check the others if they try to abuse their powers. But if one person or body holds several or all of these powers, then nothing prevents that person or body from acting tyrannically; and the people will have no confidence in their own security
For our country Nigeria to be great, we will need to ensure that no single individual is accorded such power that he/she will use to oppress others.
We cannot expect any human being to check himself; we need to put machinery in place for institutionalization of every facet of operation in the government, commerce and industry.
No one should be trusted with absolute power. He that fries the popcorn of the group should be whistling. Corruption of power is more than any form of corruption. Corruption of silence in the face of evil is the next.
Mosaku-Johnson, an IFC-certified corporate governance board trainer, is Registrar/CEO, Association of Corporate Governance Professionals of Nigeria.
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