Mr. Oluwole Ibikunle
Managing Director, Boaz Management and Financial Strategies Ltd., a financial training institution, Mr. Oluwole Ibikunle, speaks on the challenges in the financial sector, in this interview with ADEMOLA ALAWIYE.
What was responsible for the asset bubble in the capital market?
There were a lot of factors responsible for the asset bubble. All the people involved in the capital market had one or two faults. Regulatory laxity was one of them. What did the Securities and Exchange Commission do when all the sharp practices were going on? Also, the operators‘ insincerity was another reason. The sharp practices were perpetrated using the operators; they were used to manipulate shares. The investors too cannot be exonerated from the blame. I will describe their own fault as investors‘ greed. The investors saw the capital market as a place where they could put some money and get double of it in the shortest period. The capital market is a long term investment destination and not a short term investment point.
How can the Central Bank of Nigeria and SEC improve risk management in the financial market?
The greatest problem we had then was corporate governance laxity. Most organisations threw caution to the wind. I give kudos to the CBN for its current fight against practices that are against corporate governance. If the CBN can address issues of corporate governance and risk management well, then other problems will be minor. The banks were careless in the way they managed their exposures; such as margin loan to the capital market. The CBN‘s directive that banks‘ exposure to the capital market should not exceed 10 per cent of their total loans is part of risk management supervision, which I strongly support.
On the part of SEC, the leadership of SEC appears to know what they are doing. Prior to this time, SEC would not have had the guts to probe the activities of the Nigerian Stock Exchange. But on the list they released on market infractions, I think they should release the full list. There is no point in releasing a haphazard list. Publishing an incomplete list will give room for speculation that there are sacred cows. SEC should do a lot of work to publish the list because it will give credence to the its good work.
How do you think another crisis in the financial market can be avoided?
A lot of things can be done. The bubble started in the United States of America as a result of challenges in sub-prime mortgage. There is a lot of inter-locking amongst global financial institutions. What I mean by inter-locking is that you find a particular institution taking position as a result of another institution‘s position. So if any institution is hit by a problem, it will have a ripple effect on other institutions. Also, regulators must perform their duties; they must be up and doing. Infractions should not be tolerated. Some organisations have grown to be octopus. These organisations have grown so big that they have their hands in many things that are beyond the managements‘ competence. Time has come for the unbundling of those organisations. The regulatory authorities should work on this.
What is the role of training in the problems in the financial sector?
It cannot be said that lack of training was not partly responsible for the problems in the financial sector. There must be training of both operators and regulators of our financial system. Some 100 years ago, we had an asset bubble but it did not go to the extent that the last one went. Before now, financial instruments were not as sophisticated as we have now. There are a lot of sophisticated financial instruments in which people that are subscribing to them don‘t even understand. There are a lot of instruments now that require people to get more training. For example, we have derivatives and assets backed securities. These assets were not there before. These instruments are not well understood. So, it is only continuous training of operators, regulators and investors that can make them understand these instruments.
How then can training revitalise the financial sector?
When you train people, you are building capacity. You don‘t conduct training for the sake of just training people. There is what we call base line study. Training needs identification, analysis, all with a view to identifying whether the people in the financial sector have the knowledge to do what they are doing. In the course of conducting your training needs, what you are doing is finding your training gaps. Training addresses these gaps. Training gaps are deficiencies in knowledge skills and the right attitude to work.
It is a well conducted base line studies and training needs analysis that will reveal these training gaps. On the basis of the training gaps, you now package or design training that will address the gaps and make people more competent.
Training and development go together. Training is conducted to address specific deficiencies identified in a worker. When you are able to address the deficiencies in workers, definitely productivity will go up.
The worker will become skilful and more competent. The bottom line of it will be enhanced productivity. Development, on the other hand, prepares the employee for a higher responsibility. Training is meant for you to improve on the performance of your current job, whereas development is just to upscale your competencies, knowledge and skills to enable you occupy a higher position. In an economy where people are highly trained, productivity goes up. When the productivity of every company is enhanced, it has a positive effect on the economy.
Does this have any bearing on good corporate governance and risk management practices?
Corporate governance and risk management are issues in corporate management that need to be well understood. Unfortunately, there are still gaps in people‘s knowledge when it comes to corporate governance. People don‘t have the knowledge. These are areas where there should be massive training. Risk management is very wide but in Nigeria we are just groping in the dark, and that is one of the factors that led to the financial crises.
There is no profession that has been ore abused than the conduct of training. People that are not qualified to train people are conducting training. Training can be used to build and enhance capacity, thereby improving productivity. In Nigeria, there are so many training consultants.
What qualifies one to be a trainer?
As a trainer, you must have specialisation in the area where you want to train. Training is not a vocation that anybody can go into. It‘s a specialised profession. There is a law that regulates training but unfortunately that law is not being enforced. The body that is in charge of the regulation of training is the Nigerian Council for Development. They accredit trainers that need the requirement.
The requirements are very stringent. There are a lot of eligibility criteria, and it is only firms that meet the eligibility criteria that are accredited by the NCD. Our firm is an accredited management training institution. It entails a lot to get the accreditation. It‘s like a camel passing the eyes of a needle.
Our company passed through the training so I will share the experience. You must have a solid faculty on ground. Your faculty members must be accredited first. You must have a good platform with well established infrastructures. You must also have experience in conducting training. Both the directors and the manager of the firm must be experienced in training.
They will come for a first visit and a second visit as the case may be. It is when you meet all these eligibility criteria that the council will now accredit your institution as a management trainee institution in Nigeria. In the whole country, I may not be able to give an exact number, but I know they are not up to 300
Source:.punchng.com
No comments:
Post a Comment