To say that Poor corporate governance is the principle cause of all corporate challenges in Africa implies that there would be few corporate “criminals” if corporations acted as good corporate citizens with regard to human rights, social responsibility and environmental sustainability. Is this argument feasible?
Could we eliminate all corporate criminals out of business especially the new breed that’s exploiting Accounting Technology? However you answer, one fact is undeniable: The APRM can make a difference in enhancing good corporate governance in the participating countries. Consider some of these reasons why I think this is true.
Take a hard line on Poor corporate Governance.
Undeniably, you might have seen or read something about the collapse of some corporations in your country’s corporate history where thousands of people lost their jobs and shareholders lost millions of their investment.
The sad reality is that, the accounting and Auditing profession all over the world has long been criticized in most cases for failure to detect, act or inform investors of any potential problems in Company Accounts. Though some professional bodies have only recently taken a hard line on poor corporate governance and have started investigating company accounts before investors lose their money, rather than waiting for cases of corporate fraud and conspiracy to be registered or compelled to act only if the media uncovered potential accounting swindle. The APRM has an objective to ensure that corporations treat all their stakeholders in a fair and just manner and provide accountability of corporations and directors.
Who is next?
Another problem, according to legal experts, is that the specificity of the regulations governing the area of corporate fraud and their allowance of technical defenses makes bringing cases enormously expensive and securing convictions virtually impossible. The conclusion from the figures is clear: corporate fraud cases are tremendously difficult to prosecute, never mind prosecute successfully. The APRM has pledged commitment to provide an enabling environment and effective regulatory framework for economic activities.
Blow the Whistle
Every corporation faces the risk that something will go seriously wrong. It could be a fraud, a danger to health and safety or a threat to the environment.
Public inquiries, established to find the facts behind many corporate scandals and disasters have shown time and again that they could have been prevented. Several have found that staff had known about the key corporate problems but either they were too scared to sound the alarm or spoke up only to be ignored.
A whistle-blowing policy can help your corporations to detect wrong doing and take corrective action before a problem becomes a crisis. But its deterrent effect is even more beneficial to the corporation. Someone tempting to “play games” or commit a malpractice may think twice if they believe that their conduct is likely to be challenged by others in the corporation.
Crucially, APRM is promoting the adoption of codes and good business ethics. Besides, an organization whose culture encourages whistle-blowing demonstrates to all stakeholders that it is serious about building a strong corporate team.
It appears that, the push for good corporate governance and greater accountability on the continent seems to have prompted the formation of the African Peer Review Mechanism (APRM).
My expectations are very high. Mostly, am anxious to see the APRM work and make a huge difference to the corporate world.
You can find out more by downloading documents about the APRM and how you can participate, from the APRM Zambia Corporate governance page.
About the Author:
Fixed Asset Consultant at Prosperity Agencies Limited with over 10 years practical experience in physical verification, bar-coding of assets and fixed asset software implementation +260 211 239859
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