With a strategic approach that combines adherence to regulations, technological innovation, and a strong ethical culture, banks can navigate the complexities of the modern financial landscape.

In recent years, Africa’s banking sector has experienced significant growth, driven by technological advancements and increased financial inclusion. However, this growth brings with it challenges that necessitate a strong focus on corporate governance and compliance.

Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled. In the banking sector, effective corporate governance ensures that banks operate in a safe, sound, and efficient manner, which is essential for maintaining public trust and financial stability.

“Strong corporate governance is the backbone of any resilient banking system,” said Olawale Bamigboye, a seasoned legal and banking professional with over a decade of experience in Nigeria’s banking industry, on the sideline of Company Secretaries and Compliance workshop in Accra, Ghana.

Currently Assistant Company Secretary at Union Bank of Nigeria Plc and Company Secretary at UBN Property Company Plc, Bamigboye insisted that corporate governance, when done properly, “enhances the bank’s performance and safeguards the interests of all stakeholders, including customers, employees, investors, and the community at large.”

Compliance in banking involves adhering to laws, regulations, guidelines, and specifications relevant to the business processes. Non-compliance can result in legal penalties, financial forfeiture, and reputational damage.

“In today’s complex regulatory environment, compliance is about embedding a culture of integrity and accountability within the organisation, not just ticking boxes,” Bamigboye emphasised. “Banks must proactively identify compliance risks and implement robust controls to mitigate them.”

Challenges in the African context
Despite the recognised importance of corporate governance and compliance, African banks face unique challenges in implementing these principles effectively. Limited resources, evolving regulatory frameworks, and varying levels of enforcement can hinder progress.

“One of the significant challenges is the rapid pace of regulatory changes and the need for banks to adapt quickly,” notes Bamigboye. “There is also the issue of harmonising international best practices with local realities, which requires a nuanced understanding of both global standards and indigenous contexts.”

Company secretaries and legal professionals play a pivotal role in navigating these challenges. They act as guardians of governance, ensuring that the board’s decisions align with legal and regulatory requirements.

“As a company secretary, my responsibility was to bridge the gap between the board and regulatory bodies,” Bamigboye shares from his experience. “This involved organising and documenting board meetings, as well as advising on corporate governance matters and ensuring timely compliance with statutory obligations.”

Building a culture of compliance
The advent of technology has introduced both opportunities and risks in the banking sector. While digital banking enhances customer experience and operational efficiency, it also poses new compliance challenges, particularly concerning data security and cyber threats.

“Technology is a double-edged sword,” Bamigboye remarks. “Banks must leverage technological tools to strengthen their compliance frameworks, such as implementing advanced monitoring systems and investing in staff training on cybersecurity awareness.”

Beyond policies and procedures, fostering a culture that values compliance is crucial. This culture starts from the top, with leadership demonstrating a commitment to ethical practices.

“Compliance should be part of the organisational DNA,” says Bamigboye. “Employees at all levels must understand the importance of compliance and feel empowered to speak up when they identify potential issues. Regular training and open communication channels are essential in building this culture.”

Regulatory collaboration and continuous improvement
Effective compliance also requires collaboration between banks and regulators. Open dialogue can help in anticipating regulatory changes and aligning business strategies accordingly.

“Regulators and banks should view each other as partners in promoting a stable financial system,” Bamigboye suggests. “By working together, they can address systemic risks more effectively and foster an environment conducive to sustainable growth.”

As Africa’s banking sector continues to evolve, the importance of robust corporate governance and compliance cannot be overstated. Professionals like Olawale Bamigboye highlight that while challenges exist, they are not insurmountable. With a strategic approach that combines adherence to regulations, technological innovation, and a strong ethical culture, banks can navigate the complexities of the modern financial landscape.

“The future of banking in Africa is promising, but it requires a steadfast commitment to doing things the right way,” Bamigboye concluded. “By prioritising corporate governance and compliance, we lay the foundation for a resilient and prosperous banking sector that can drive economic growth across the continent.”