Paul Usoro is one of Nigeria’s leading lawyers, with industry-leading expertise in commercial and telecommunications law. In the fourth part of a series of articles, he tackles the issue of institutional reform of the Nigerian Bar Association. He recently completed a series of articles on the issue of welfare for young practitioners in the legal profession and wider industry reforms for The Daily Times which you can find here.
The KPMG Report in its findings, confirmed the fears of most lawyers in regard to the NBA’s finances and its management, under the headings, “Inadequate system of internal controls” and “Financial reporting transparency”:
“The existing finance function is rudimentary and not fully developed to support the Association effectively. Key finance activities have not been properly defined, and finance staff do not have a full appreciation of their role.
“The NBA is yet to establish a proper internal control framework and an internal audit function.
“The financial statements of the NBA are not published on the Association’s website.
The annual reports of the NBA do not bear adequate qualitative information about the operations of the Association.”
These are very damning findings for an association like the NBA and call for immediate remediation. Little wonder lawyers are so very distrustful of the NBA as it relates to the Association’s finances and its management. The common refrain amongst lawyers is that the Association’s leaders feed fat on the perceived “wealth” of the Association leaving the members without any benefits. Some lawyers have consequently switched off from the affairs of the Association; some others have bloated expectations of the Association based on the perceived notion of a cash-rich Association – a notion that is not necessarily rooted in established financial numbers seeing as the Association’s financial statements, according to the KPMG report, “do not bear adequate qualitative information about the operations of the Association” and “are not published on the Association’s website”. In all of these, the credibility of the NBA and its leadership suffer great harm both amongst its members and with external stakeholders.
In remedying the situation, I recommend, as the first remediation step, that the NBA National Secretariat, working with and through the elected NBA officers, as a matter of routine, prepare, present and publish quarterly financial statements of the Association and also its annual reports. This is a standard practice for all properly run and established organizations, be they profit-oriented or not; the members of those organisations are enabled thereby to factually and continually gauge the financial health of the organization.
The NBA members require such enablement based on published quarterly financial statements which contain “adequate qualitative information about the operations of the Association”; only then will the current distrust of the Association’s leadership diminish and ultimately and hopefully be erased.
I, perhaps, need to elaborate some more on two of key milestone activities afore-specified, to wit, the quarterly/annual preparation and public presentation of the financial statements. It is the practice of all structured organisations and institutions to hold quarterly meetings of its directing minds where, amongst others, detailed quarterly financial statements are reviewed, and the financial health of the organization assessed.
The NBA equivalent of those meetings are our quarterly NEC meetings and I believe that a permanent agenda item at those meetings should be the presentation and review of the Association’s quarterly financial statements containing adequate “qualitative” data. The annual reports would, of course, be presented and reviewed at the Association’s Annual General Meetings (“AGMs”) which are always held during our Annual General Conferences but with the allocation of sufficient time for structured quality interventions – not any different from the annual general meetings of all other structured organisations and institutions.
Currently, the NBA routinely prepares and presents its annual reports during its AGMs even though these have been described by the KPMG Report as not containing “adequate qualitative information about the operations of the Association”. The point we make is that the significant innovation in our Reflections, in terms of the quality and frequency of preparation and presentation of the NBA’s Financial Statements, would be its quarterly preparation and presentation at our NEC meetings in addition to the present practice of presenting annual reports at our AGMs.
Quarterly financial reporting, amongst other benefits, enables early detection and correction of possible lapses in the organisation’s financial, accounting and investment policies and management apart from constantly updating the directing minds/members of the organization on the financial status of the establishment. The NBA would benefit greatly from such an institutionalised practice just as it would benefit from a transparent publication of its qualitative financial statements, at the minimum, on the NBA’s website.
I know of at least one branch of the NBA that routinely prepares and presents its monthly financial statements at its monthly meetings – complete with full disclosures and required explanatory notes. Ahead of these meetings, the financial statements are routinely circulated to the members of the branch and robust discussions are allowed by the executive during the monthly meetings. The credibility quotient that is thereby vested in the branch’s executive can only best be imagined. So far, I’ve not heard any whisper of complaint against the executives of the branch in relation to financial mismanagement, graft or any of the sort.
The NBA at the national level can benefit from such transparent practice through the publication of its quarterly and annual financial statements on the Association’s website and its circulation to NEC members ahead of each quarterly NEC meeting. Not only would this represent the international best practice which the NBA should be aiming for, it would, more importantly, revive the confidence and trust of members in the Association’s leadership. The credibility of the Association amongst our external stakeholders would also be greatly boosted.
(To be continued)