When corporate governance fails in Africa, it is rarely only shareholders who suffer. Weak board oversight and absent whistleblowing channels can drain public resources, deter the investment that economies need, and leave ordinary citizens to absorb the cost of scandals that better governance might have prevented. That was the warning from lawyers and regulators speaking at the Annual Conference of the International Bar Association (IBA) in Copenhagen on Thursday 8 October, where a panel chaired by Dr Elvis Botah of the University of Professional Studies in Ghana examined corporate governance, anti-corruption and compliance across the continent.
Dr Botah, a management consultant and academic, told the conference that Africa needs to adopt “corporate governance as a living culture” if it is to attract investment and improve its business climate. Nigerian lawyer Chiagozie Hilary-Nwokonko, of Streamsowers & Köhn, was blunter. The culture, he warned, is at best “a work in progress”.
For the public, the stakes are concrete. Heather Irvine of Bowmans South Africa argued that corporate governance and compliance should be treated as “the price of entry” to the market, while acknowledging how hard implementation remains across a patchwork of regulation spanning different countries, regional blocs and the African Continental Free Trade Area. A fragmented rules landscape makes it harder for citizens, workers and consumers to know that the companies they depend on are being held to account.
Nowhere is that accountability gap more visible than in state-owned entities. Gareth Driver, of Webber Wentzel in South Africa, explained that these bodies are particularly vulnerable because governments often shield them from the worst consequences of their failings, a dynamic he attributed to “the mingling of interest that plays out in state ownership of corporations”. The state, he said, often looks for and mandates a social impact rather than a simple financial return, and views state-owned entities as a key employer of its supporters. For the taxpayers who ultimately stand behind such companies, the effect is that poor governance can persist without the corrective pressure that private failure would normally bring.
The panellists agreed that education of executives, board members and investors is essential to building a genuine corporate culture. Driver advised the installation of effective and regularly tested internal governance controls, noting that “the biggest risk for non-executive directors in a company is ignorance”. 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 on a board and the profitability of a company. That link matters for anyone whose savings, job or services depend on well-run firms.
Whistleblowing emerged as a second pillar of protection for the public interest. Companies need to provide a secure mechanism for complaints and ensure they are properly investigated, said Nwokonko, through “basic commonsense things” such as securing evidence and preventing retaliation. Without those safeguards, he warned, “the cultural setting discourages whistleblowing because people are afraid of retaliation and there is cynicism that nothing will change”. In practice, wrongdoing that affects citizens can go unreported and unremedied.
Technology, however, is shifting the balance. Irvine noted that installing proper monitoring is getting easier, and that artificial intelligence “brings to the table the combination of volume and speed and reach”, allowing even small companies to understand what their employees and senior managers are doing and how this exposes them to risk. She was quick to add a caution: “Technology without culture is really just surveillance.” AI “can detect patterns” but it “can’t tell good from bad, it doesn’t have a moral compass”.
Regulators are already deploying these tools on the public’s behalf. Irvine told the conference that the Competition Authority of Kenya (CAK) has invested in a digital laboratory to provide forensic investigations and prosecutions evidence, while the COMESA Competition and Consumer Commission has joined Stanford University’s Computational Antitrust project. Because many of these tools are built on open-source software, she argued, Africa has an opportunity to start building its own compliance systems, adding “we want to be producers and not only consumers of this technology”. Readers interested in the wider governance debate can find related coverage at https://www.africanlawbusiness.com/news/iba-copenhagen-building-africas-corporate-governance-culture/.
Irvine, speaking as a competition lawyer, pointed out that anticompetitive conduct is “often a symbol of a deep failure of corporate governance”, suggesting that competition enforcement can be used to reduce corruption and bribery levels while giving African economies a strong case to attract business.
The panel’s closing message was directed squarely at the wider community. “Corporate governance matters, it really does matter, it is what drives economic growth,” Nwokonko concluded. “In Africa we need to take it very seriously, as lawyers we need to champion it, because when it goes wrong, everyone ends up paying.” Whether that warning translates into boards that treat governance as a living culture, rather than a work in progress, remains the open question for the citizens who bear the cost when it fails.