CBN charges bank directors on corporate governance, money laundering

As part of efforts to combat financial crime and money laundry, the Central Bank of Nigeria has charged bank directors to devise effective ways to tackle the assessed high-level frauds bedevilling the industry.

In a training organised by the Financing Policy and Regulation Department (FPRD) of the apex bank, which centred on corporate governance and anti-money laundering, the regulator also reiterated the urgent need to combat the financing of terrorism.

The Deputy Governor, Financial System Stability, CBN, Dr. Okwu Joseph Nnanna, said: “It is obvious that money laundering and the financing of terrorism are financial crimes, which have disastrous economic effects.

“What we must note is that there is an interface between weak corporate governance, money laundering and financing of terrorism, which may not be very obvious to the ordinary observer.

“It will not be wrong if one considers them as mutually reinforcing since weak corporate governance can be compromised by vendors of money laundering and terrorism financing and vice versa.”

Nnanna noted that the issue of corporate governance has become topical globally, especially considering the role it played in the global financial crises of 2008, and its implications for the stability of the Nigerian financial system.

Additionally, he pointed out that, it is important to note that before now, the problem of weak corporate governance was regarded as the prerogative of management alone, with very little blame for board members.

Nnanna said the recent untoward developments in our financial system have forced a reversal of this trend and to demonstrate that effective corporate governance is correlated with strong institutions that are nurtured by ethics and professionalism.

To him, recognizing the role of corporate governance in the success of institutions is quite in order, but what will be more instructive is that there is a programme that ensures that required managerial skills and the process of continuous enhancement of the capacity of board members to ensure compliance with corporate governance ethics in their various institutions is sustained.

The Director, FPRD, Kevin Amugo, stressed that, CBN had strategise ways to fight money laundering and combating the financing of terrorism as a key priority of its responsibility for the effective regulation and supervision of banks and other financial institutions, especially in the face of increased terror activities within Nigeria and Sub-Saharan Africa countries.

“I would like to emphasize that the Central Bank of Nigeria has an unwavering interest at enthroning best corporate governance practices that would ensure a high degree of integrity in the banking sectors.

“As directors of boards in the banking industry, your decisions shape the direction of banking in Nigeria and to a large extent determine the effectiveness of monetary policy and the contribution of the sector to the development of the real economy,” he said.