The Institute of Chartered Accountants of Nigeria has identified trust deficit as one of the major reasons for governance and organisational failures.
The President of ICAN, Mrs Comfort Olu Eyitayo, said this in Abuja at the 51st Annual Accountants Conference of the Institute.
The Institute’s conference remains the largest annual gathering of professional accountants in Africa.
The past 50 editions had discussed germane topics and proffered practicable recommendations which had contributed immensely to the ongoing debates and engagements on the transformation process of economies and the role of accounting profession in nation building.
These recommendations have continued to influence policies and reshape governments’ programmes, and reposition corporate entities for better performances.
Speaking on this year’s theme, “Trust in Governance,” the ICAN President described trust as the ultimate currency in the relationship that all institutions must build with their stakeholders.
She said the theme is not just central to reshaping governance across political, public and corporate institutions, but it is the bedrock for achieving a successful union between prosperity, people and planet.
With business, political and social environments changing rapidly, Eyitayo said it had become imperative for stakeholders to rethink governance against the backdrop of the New Normal.
She said, “Digital disruption, democratization of knowledge and ubiquity of information have positioned people at the vantage of the global scene, with access to real-time information and unprecedented capacities to verify the authenticity of such information.
“These have further exposed leadership failures and raised awareness on the lack of transparency and accountability that characterizes some public and private institutions.
“Global economies continues to face trust deficit both at public and private institutions.
“This has not only led to poor social, political and economic outcomes but has regrettably resulted in the collapse of so many organizations. Many States have failed due to mistrust that pervaded the society.
“Lack of trust in government has led to heightened insecurity in many nations and the income generating potentials of a number of economies have dwindled as distrust constitutes a disincentive for citizens’ carrying out their civic duties, responsibilities and obligations.”
The ICAN President said a survey of most corporations that went bankrupt revealed that one of the underlying factors leading to the collapse of some of them was lack of trust or failure of leaders to adhere to the principle of accountability and transparency.
“The Enron Scandal would remain evergreen. Its failure, unfortunately, is the discouraging narratives of most failed institutions.
“Enron fell from the peak of a business giant to become an example of how institutions should not be managed.
” Its downfall was occasioned by leadership fooling regulators with fake holdings and off-the-books accounting practices and using special purpose vehicles (SPVs), or special purposes entities (SPEs), to hide huge debt and toxic assets from investors and creditors. The once ‘too-big-to-fail’ corporate is now history due to trust issues,” she added.