Opinion
Pan-African Scale Outpaces Regulatory Harmony: A Board Governance Challenge
Pan-African firms are outgrowing fragmented regulation and Western governance yardsticks. Three fixes could close the gap, from local boards to regulatory passporting.
By Des H. Rikhotso
Pan-African corporate scale is outpacing regulatory harmony. As fintechs, banks and telecoms expand across borders, their boards face a paradox: satisfying conflicting sovereign mandates at once. What works in Nairobi may fail in Lagos. What is lawful under the West African Economic and Monetary Union (UEMOA) may breach rules in the Southern African Development Community (SADC). No single board can be globally compliant and locally operational at the same time.
Governed by Someone Else’s Rulebook
The gap starts with Western governance templates. Index providers such as FTSE and MSCI, and listing venues such as the London Stock Exchange, grade companies against models like the UK Corporate Governance Code, which demands a heavy majority of independent non-executive directors.
African reality differs. To survive, a pan-African board needs politically astute directors who understand the regulators of Nigeria, Kenya or Egypt. Proxy advisers such as ISS and Glass Lewis often deem these very directors insufficiently independent, dragging down governance scores.
Disclosure poses a second trap. Global investors demand full transparency on material risks. Yet revealing a delicate negotiation with a central bank over devaluation or fines can spook markets or provoke regulators. Boards lose either way.
The underlying problem is structural. Governance for these firms is no longer about upholding one high standard; it is about reconciling contradictory laws. Companies that pursue dual listings or foreign capital are judged by frameworks that assume a centralized corporate structure, creating a wide expectation gap.
Three Ways to Close the Gap
Despair is not a strategy. Three remedies deserve attention.
Hub-and-spoke governance. Give autonomous local advisory boards real authority, reporting to a lean group board, rather than micromanaging from a holding company.
A RegTech committee. Lift compliance out of internal audit and into a standalone board committee tasked with managing regulatory divergence across jurisdictions.
Regulatory passporting. Regional bodies such as the African Continental Free Trade Area (AfCFTA) and the Economic Community of West African States (ECOWAS) should push for mutual recognition, so compliance in one market counts in another. The European Union offers a model, but Africa’s version must fit its own institutions and uneven regulatory capacity.
Investors and index providers, for their part, should stop treating local expertise as a governance flaw. Until then, Africa’s boards will keep paying for compliance with rules written for someone else.
Des H Rikhotso (PgDip-BA, MBL) is a seasoned C-suite Multi-Industry business executive with 25+ years of Business Leadership Experience across the South, East and Western Sub-Sahara Africa Region. Based in Kampala, Uganda he serves as East Africa Region Business Executive, driving Business Strategic Growth and Operational Excellence – contributing his Leadership Voice and Clarity to the Region. Des has held Business Leadership roles at BMW Group Africa, Volkswagen Group Africa, Peugeot Motors South Africa, Toyota/Lexus South Africa, Nissan Group of Africa, G.U.D Holdings (Africa Exports Operations Division) and The HDR Group of Companies. He holds Under-Graduate and Post-Graduate business degrees from the University of the Western Cape, Wits University (Wits Business School) and the University of South Africa.