The National Council on Privatization
mandates the staffs of the enterprises to be privatized and commercialized to
own shares in them so as to enable them mange the enterprises more efficiently.[1] The council took this step from the Act[2]
which provides that staffs of enterprises should hold 1% of its shares. The
reason behind this provision is to ensure that the staffs are committed to the
success of the enterprises.
They will have a laisser-faire attitude
towards its success if they see that they stand to lose nothing if they fail,
but they will act with zeal towards its success if they perceive that they have
a reasonable stake there at.
This has long been identified by Lindley
J. who held in Re North Australian Territory co, Archers case that
“it is to give him personal interest in
the affairs of the company and to induce him to attend to them in a way very
different from what it would be if he had no interest at all”
Similarly, Pennington[3]
submitted that the need for this requirement is: “to ensure that they (the
directors) have a material at stake in its (the company) success and will
devote their best endeavor in its service, if only to preserve the value of
their own investment”.
In as much as the objective of this
provision under discussion is commendable, I do not consider that a 1% stake on
a company will make any staff or director to pay his maximum attention to its
affairs.
So I recommend that whenever the
legislators shall find the opportunity to amend the Act, there should be an
upward review of staff shareholding in a privatized or commercialized
enterprise.
This will invariably increase the degree
of attention he pays and his extent of commitment to the affairs and success of
the company.
It is further recommended that such companies
should be mandated to incorporate in their Memorandum or Article of Association
a clause or clauses specifying the share qualification of not only their
directors but also their other officers and staffs.[4]
[1] The privatization handbook of the National
Council on Privatization 2nd Ed 200 P.43
[2] Public Enterprises (Privatization and
Commercialization) Act Cap 38 LFN 2004. S.5(3)
[3]
Pennington’s Company law, pennington R, 7th Ed.P.499
[4]
S.251 CAMA,199S