Whether it is the board of a government-owned company, or private company board, Udoma Udo Udoma has served on the boards of a number of important establishments. He was the first chairman of the Corporate Affairs Commission (CAC) and chairman of the Securities and Exchange Commission (SEC). In the private sector, he was chairman of UAC and chairman of Union Bank of Nigeria from where he was appointed Minister for Budget and National Planning by President Muhamadu Buhari. Upon acceptance of the appointment he resigned from all his private appointments. Below, Udoma explains the dichotomy between government and private-sector boards:
1. Board function in the public sector is a little different from private sector boards because the public sector is not necessarily driven by a profit motive. Therefore, the ways performances are measured is different, and so it is not easy to equate a board chairman in a public institution like SEC or CAC with that of a private sector company. The dynamics are different. As chair- man of CAC, you report to the minister, and you are bound by the rules and regulations of the public sector, of government and your term is generally subject to the whims of whoever is in government. That is why we hear of boards of public companies and agencies being dissolved by announcement. On the board of a private company in which you are a member, courtesy of being a shareholder, or because some shareholders support you, your primary objectives are much more straight- forward. Your deliverables are clear. You want to make profit. Your principal responsibility is therefore to all shareholders who have invested in the business in expectation of making a return. However, in addition to having to turn a profit for the benefit of your shareholders, you will also have to respond to the needs and demands of other stakeholders which include the community in which you operate; so you also have a social responsibility. Though as a board member you are accountable to the shareholders, you are fairly independent to take decisions in what you consider is in the best interest of the company. In addition, provided you make reasonable profits for your share- holders, you are fairly secure in terms of your term of office. In some cases, you may even have negotiated a minimum term of office which the shareholders will respect. This means you have greater predictability in your term, as well as a greater certainty in terms of the objectives you are pursuing.
2. Notwithstanding these differences, there are some skills which apply, whether you are in a government board, or private company board. For example, knowing how to work with people to build consensus. Ultimately, the role of the chairman is to try and build consensus and get people moving in an agreed direction. In the private company, it is easy to assess and measure the contributions of the management and staff, based on whether they are making money for the company. It is therefore much easier to set targets for the managing director as this can be defined in monetary terms. One can therefore assess whether those targets are being met. Generally, where management are making good profits the board is willing to give them a lot of flexibility and freedom in how they choose to operate. However, the consequences of not meeting these financial targets can be losing your job. It can also lead to the chairman losing his position. All this helps to concentrate the mind and keep both management and the board focused. Whereas in government, the objectives are not always as clear, or as easy to define. This means that, at the end of the day, boards of pub- lic companies do not generally have the same sense of urgency and focus as boards of private establishments.
3. Whether public or private, working on any board can be challenging and exciting. It is true that when you are able to run a successful, profitable company or business, you are much better compensated than in public service. Nevertheless, I am quite public-spirited. I find that what one does in a public ser- vice role can have an impact on many more people than what- ever one does in a private company. This is the main reason I have, from time to time, accepted to serve in public boards, and in public office. In the private sector, at best you will be able to help your shareholders—2000 or 3000 shareholders maybe. You may also do a little bit for the community in which you are located. That is the maximum impact.
4. However, the impact of what you do in government is much greater in that you can take decisions that can help mil- lions of people. In the public sector, if you want to do it honestly, you don’t get much out of it financially. But in terms of impact, it is much greater. I went to the Senate for one main reason: I thought that my state was not getting its fair share, particularly in terms of oil revenue. Working with my col- leagues in the National Assembly, and with the support of my State Governor, we championed a bill to remove the dichotomy between offshore and onshore oil. We also persuaded the President, Olusegun Obasanjo, to bring an executive bill on the same subject, which we merged with our own bill. I chaired the Senate Committee which considered and processed the bill. We managed to get the bill passed, not once, but twice. The first time in my first term, and the second time in my second term. Let me explain. During my first term the President refused to sign the bill, so during my second term, we passed it again. But this time the President agreed to sign. The effect of the bill was monumental for my state, Akwa Ibom State. It changed the State from being one of those with the least allocation of derivation resources from the Federation Account to being one of the largest recipients.
5. Consequently, Godswill Akpabio, the next governor that came in had resources much, much, larger than Obong Victor Attah had; and so he managed to transform the state. Those resources were things that I played a significant role in getting to Akwa Ibom State. When I go home and I go round and I see all the developments, I take pride in the fact that I played my modest contribution to ensuring that my State could generate the resources which were used for the transformation of the state. This gives me great pleasure and a sense of achievement. Actions in the public space can have a major impact on the lives of so many people.
6. The public sector is particularly satisfying from the point of view of when you have made a contribution and you can see the impact on so many people. Look at what we did when I was the first chairman of CAC. We transformed the place, computerized the place and made it easier and faster to register companies. At SEC, we set up a Capital Market Committee under Dotun Sulaiman that looked at the structure of the whole capital market and came up with a report to reform the capital market. We set up a Committee on Corporate Governance under A.B. Mahmoud (SAN) that came out with a new corporate governance code.
7. At a point when there were issues concerning the management of the Nigerian Stock Exchange, we supported the then management of SEC to put in new leadership through a transparent, open and competitive process. SEC helped to put in the current chief executive of the NSE who was recruited from the Diaspora. This helped to maintain public confidence in the stock exchange. These three things I can quickly remember that I helped to do during my term of office as the chairman of SEC.