Amid all the hysteria surrounding the Central Bank of Nigeria’s donation of N100m to Kano victims of the Boko Haram terror attacks two weeks ago, the CBN Governor, Mallam Sanusi Lamido Sanusi, sought to justify the exercise of his authority to provide this charity initiative on the basis that it was neither ill-considered nor ephemeral, but was within the financial framework of the CBN’s corporate social responsibility function. Sanusi made this clarification on Monday, February 20, 2012, while donating, on behalf of the CBN, another N25m to the victims of the Christmas Day bomb blast at St. Theresa’s Catholic Church, Madalla, Niger State. He also noted that this CBN’s CSR has hitherto been formulated ‘to render assistance in critical circumstances like the unfortunate loss of lives.’
To be fair, the complaint against Sanusi’s power is hard to sustain because, since 1990s, the CBN’s CSR programme itself has made investments of hundreds of millions of naira in projects associated with governmental bodies/agencies and projects targeting academic and professional institutions, sport development and other aid programmes. But then, what is ‘corporate social responsibility’? The term simply refers to the assumption of responsibilities by a corporate body, whether voluntarily or by virtue of legislation, in discharging socio-economic obligations in the society. Although in general terms the Central Banker’s primary objective has traditionally been to control and administer monetary and financial policies of the government, social responsibility function has, however, been accepted globally as part of this objective. A cursory inspection of the activities of the central banks in other parts of the world shows that this statement is not untrustworthy.
For instance, the central bank of the United Kingdom, the Bank of England, often provides financial support to organisations whose work is valued highly by the Bank and contributes to the pursuit of the Bank’s core purposes. Similarly, the US central bank, Federal Reserve Bank, has the power to offer financial assistance to individuals, partnerships, and corporations, though it has very limited authority to provide financial assistance to state or local governments. Also, the European Central Bank does offer charitable donations in cash to charity organisations which are not affiliated to any political organisation, but instead operate in the social and humanitarian fields across the Euro area. Moreover, in the aftermath of the 2004 Indian Ocean earthquake, the Thailand central bank, Bangkok Bank, even donated 10 million baht (about $300,000), in addition to providing benefits in kind, to assist tsunami relief efforts. The point is that despite what has been highlighted by vocal critics of Sanusi about the CBN’s core purposes of formulating and achieving macroeconomic policy objectives, it is evident that social responsibility is a mainstream part of the central bank’s activity around the world.
Yet the idea of the central bank’s commitment to corporate social responsibility can be understood to embrace two principles: the philanthropic and the trusteeship principles. When, for instance, the CBN performs charitable function by donating to voluntary bodies, agencies and institutions, it is then concerned with corporate philanthropy, thereby helping to resolve certain social problems in the country. On the other hand, trusteeship principle will perceive the same CBN as trustee for its shareholders (the government) and, of course, the wider Nigerian community. This means that while corporate philanthropy is concerned with, say, the CBN’s role in society, the corporate trusteeship is, however, more concerned with the awareness of a sense of responsibility on the part of its directors towards the general public with whom they are directly concerned. Therefore, corporate social responsibility is, it seems, the outcome of interplay between corporate philanthropy and trusteeship principle. The interplay between these two dimensions of corporate social responsibility suggests, in a way, a need for the CBN to tread a fine line between making ad hoc donations and formulating monetary policy — the main thrust of this piece.
By its composition, the apex bank consists of a Board of Directors (or the Board), including the Governor as the Chairman, responsible for the policy and the general administration of the affairs and business of the CBN. This composition suggests that there are checks or balances on Sanusi in the sense that the Board has a say over his performance. However, regardless of the Board’s oversight, the concerns that have been expressed by well-meaning Nigerians over the intensification of CBN’s charitable activities in the country should not be waved aside. Why? This is because one of the features of corporate social responsibility is to provide a ‘good service’ to the community. And this requires the corporate body to exercise its power equally for the benefit of this community since this power is held in trust for the community. According to the concept of trust, the assets of donors are held in trust by trustees for the benefit of the ‘cestuis que trust,’ i.e. those who are usually known as the beneficiaries. This principle, thus, imposed a reciprocal obligation and a self-imposed ethic upon the trustees to act in the best interests of their beneficiaries. By implication therefore, the Board of the CBN is required to act honestly and in good faith in the performance of its duties. It must also act with due care and diligence by having regard to the concerns of the Nigerian public.
With regard to CBN’s corporate social responsibility function, it is recognised, though, that what is socially responsible is situated by contemporary needs and concerns and cannot be pinned down in price and unchanging terms. Having said that, it is also important to bear in mind that the CBN has no direct responsibility for the solution of the many problems that plague the country. Neither has it the ability, unilaterally, to solve them. This means that rather than offering willy-nilly donations, financial assistance by the CBN should rather be made to organisations and activity groups whose work contributes to the pursuit of its core purposes of maintaining monetary and financial stability. However, in the case of ‘critical circumstances’ needing urgent assistance, the CBN’s charitable donations will be more effective if these are channelled through the National Emergency Management Agency which has been established, pursuant to National Emergency Management Agency (establishment, etc.) Act 1999, to manage disasters in Nigeria, and to make provision for various matters connected therewith.
There can be no good reason why Sanusi should be making financial contributions to victims of disasters, natural or otherwise, directly to the state governments. Such contributions, it seems, devalue the functions of NEMA that is statutorily placed to co-ordinate and facilitate emergency relief operations in any circumstance, and in any part of the country. Most of all, there is nothing proper or charitable in making the CBN assume the financial responsibilities which the state owes to its citizens to provide for their needs in peace and adversity. In any case, if a state government is not equipped to address the needs of its citizens, the Federal Government is better suited to make decisions and take actions that will provide assistance to that state. In this regard, it is suggested that whenever the CBN Board intends to carry out the CBN’s corporate social policy in future, it must consider the concerns of the broader community by taking account of the perceptions the community has of its social responsiveness. A failure to consider these concerns will be regarded as a potential breach of trust, and hence unconscionable.
