African companies need proper board oversight and whistleblowing mechanisms to encourage investment and avoid corporate scandals, according to lawyers speaking at the IBA Conference in Copenhagen.
Dr Elvis Botah, a management consultant and academic, said Africa needs to adopt corporate governance as a living culture to attract investment and improve its business climate.
Nigerian lawyer Chiagozie Hilary-Nwokonko stated that this culture is currently “a work in progress” at best.
Heather Irvine of Bowmans South Africa emphasized that corporate governance and compliance should be “the price of entry” to the market, highlighting the struggle for implementation and coordination across different countries and regional blocs.
Gareth Driver, from Webber Wentzel in South Africa, noted that state-owned entities are particularly vulnerable due to the mingling of interest that plays out in state ownership of corporations.
Driver explained that the state often looks for and mandates a social impact, rather than a simple financial return from state-owned entities, which it views as a key employer of its supporters.
The panellists agreed that education of executives, board members, and investors is essential to the corporate culture, with Driver advising the installation of effective and regularly tested internal governance controls.
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Caliis Badoo, head of legal and enforcement at the Ghanaian Securities and Exchange Commission, highlighted a direct correlation between the proportion of independent non-executive directors and the profitability of a company.
Nwokonko emphasized the importance of whistleblowing, saying companies need to provide a secure mechanism for complaints and ensure they are properly investigated.
Irvine noted that installing proper monitoring is getting easier with the use of AI, which brings a combination of volume, speed, and reach, allowing even small companies to understand what their employees and senior managers are doing and how this exposes them to risk.
However, Irvine cautioned that “technology without culture is really just surveillance,” and AI can detect patterns but can’t tell good from bad, lacking a moral compass.
The regulators are already using this technology, with the Competition Authority of Kenya investing in a digital laboratory to provide forensic investigations and prosecutions evidence.
The COMESA Competition and Consumer Commission has joined Stanford University’s Computational Antitrust project, and many of these tools are built on open-source software, creating an opportunity for Africa to start building its own compliance systems.