Managing the transitions of individuals between the public and private sectors has long been a subject of significant discourse globally. There is a broad consensus that when structured and managed effectively, the cross-pollination of individuals between these sectors can strengthen the operational capacity of both, allowing for the transfer of ideas, methodologies, and practices that can significantly improve governance, corporate strategy, and policy implementation.

However, this topic also invites strong debate due to its inherent risks, particularly concerning conflicts of interest, regulatory capture, and the potential erosion of public trust. The challenge lies in managing these transitions in a manner that preserves institutional integrity and maintains the overall effectiveness of governance.

At its core, the essence of public-private transitions lies in its ability to harness the complementary strengths of both sectors. When managed effectively and ethically, such movements can serve as catalysts for institutional reform, policy innovation, and the advancement of public and corporate governance. As Dr. Emomotimi Agama, the Director-General of the Securities and Exchange Commission (SEC), aptly noted, “Public-private transitions are not merely desirable; they are essential for promoting collaboration and innovation. The exchange of knowledge and expertise between these sectors can greatly enhance their respective capabilities, contributing to a dynamic and resilient economy.”

Nonetheless, the ethical complexities inherent in these movements must be addressed through robust regulatory frameworks, transparency, and an unwavering commitment to the public good. It is only with these safeguards that the full benefits of these transitions can be realised without compromising the integrity of either sector.

This topic was discussed extensively by senior representatives from both the public and private sectors, during a session I facilitated at the recent 30th Nigerian Economic Summit (NES). I was pleased to see such high levels of engagement from participants across both sectors, along with a strong commitment to ensuring that Nigeria’s regulatory structures are fit for purpose in managing these transitions.

The good news is that Nigeria has already established a strong foundation. The Nigerian Code of Corporate Governance (NCCG) 2018 provides for a comprehensive framework by mandating a three-year cooling-off period for individuals who have held senior regulatory positions before they can join private institutions that were directly under their supervision. This principle is reflected across specific sectoral guidelines within key Ministries, Departments, and Agencies (MDAs).

Stakeholders at the NES were aligned on the fact that this three-year period meets, and in some cases exceeds, global best practices, particularly when compared with Europe and other Western jurisdictions where cooling-off requirements tend to be more lenient, ranging from 18 months to two years. Some stakeholders even suggested that Nigeria’s cooling-off period could be adapted to allow more flexibility, such as reducing the cooling-off period where the regulator did not have a direct supervisory role over the company involved.

While the acknowledgement of the strength of existing regulations is encouraging, there appears to be a general lack of awareness regarding their existence and application. This knowledge deficit can lead to misconceptions about non-compliance, potentially eroding trust in market integrity and weakening the credibility of regulatory systems. Furthermore, there is limited clarity regarding the enforcement of these rules, and it is important that the ecosystem understands and implements the enforcement mechanisms that ensure compliance.

The question for Nigeria, then, is how can we build on the foundations in place and introduce additional mechanisms that enhance public awareness and understanding while also strengthening the integrity of the process?

There are several ways to do this, and a strong opportunity to leverage the level of current interest and engagement across government, private sector and civil society to further deepen Nigeria’s leadership position in this area. But we must ensure that in our efforts to further strengthen, we find the right balance between public trust and the ability to leverage and grow sectoral expertise.

The first option is to consider the establishment of a formal assessment procedure which could help determine the appropriateness of such transitions on a case-by-case basis, ensuring that all movement between the public and private sectors is subject to rigorous ethical scrutiny. This approach would include a focus on conflict of interest regulations, mandating the disclosure of any relationships and interests that may influence decision-making.

The second option is to move away from a one-size-fits-all approach to cooling-off periods to a model that allows them to be adjusted depending on the specific regulatory and economic context in question. Stakeholders at the Summit expressed considerable enthusiasm for this approach, which could involve longer cooling-off requirements in particularly sensitive cases, while allowing for shorter periods where conflicts of interest are less discernible. The approach to this needs to be standardised to guide implementation.

The third option is to consider how to extend regulation beyond simple formal influence. We have strong guidelines in place around formal transitions, but there is more ambiguity around other forms of influence such as indirect lobbying or consultancy work. There is an absence of clear and enforceable rules in this space that creates the potential for loopholes to be exploited.

Finally, we could consider a more proactive approach to enforcement, strengthening oversight bodies and reporting requirements and imposing greater sanctions for violations.

It is important to note that each of these recommendations is not an indication of a deficiency in the existing framework. Nigeria’s regulatory structure is already competitive on a global scale. However, we must take a dynamic approach and constantly consider the innovations required to embed integrity into the system, to enhance awareness and build public trust. If we do so well, we can realise the immense benefits of cross-pollination between the public and private sectors, for the benefit of Nigeria, and all of its people.

Ajogwu is a Lagos Business School Professor of Corporate Governance.