Report true state of operations - companies urged

Accra, Aug. 7, GNA - Corporate bodies have been asked to report the true and fair state of their operations instead of cooking up sweet and favourable, yet incorrect positions of their activities. They should also have different firms to handle consultancy and auditing to ensure corporate checks and balances to protect shareholder value.

Dr Noel Tagoe, a Lecturer of the University College of Dublin in the United Kingdom, made the call in a lecture on the theme, "Practising Good Corporate Governance, The Role of Corporate Institutions". It was to expose students, business operators and listed companies to the dangers of not operating as a good corporate citizen and its effects on the company and industry.

Citing the case of Enron, the former largest producer and supplier of gas in the United States, Dr Tagoe said it was wrong for Boards to be working in the interest of the management of companies. "The interest of workers and shareholders of listed companies should be paramount at all times. When the management of companies can manipulate their boards, it is difficult for them to take decisions that are in the interest of the workers and shareholders as it should actually be".

He called for worker representation on boards, saying, this would ensure that their interest is upheld and protected at all times. "They should also have a legal backing so as to make their views relevant and workable," Dr Tagoe said.

He explained that in the case of Enron, a staff made a complaint, asserting that the company was heading for bankruptcy, "but because the management, auditors and the lawyers were in league to fleece the shareholders, the auditors gave it a clean bill of health, only to protect their interest and their gains thereof".

A lot of shareholders in the Enron case lost some of their gains in the stocks they had since most of them held on to it for too long or bought it too late in the day when they did not know that the company was fast going bankrupt.

"Shareholders and investors should not always be aiming at double or triple digit gains, but look at the capital and dividends as well".

They should watch the market closely to exit at the right time.

Dr Tagoe noted that earlier shareholders of Enron, however, made their money as the company initially showed great promise and proved capable until it started engaging in non-core business and bad unethical business practices.