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Prioritising Good Corporate Governance

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Stakeholders in business cycle have re-emphasised the importance of good corporate governance as the lubricant that oils the engine of successful brands. They said aspiring entrepreneurs must imbibe this, if they want their business to outlive him.

Chairman, Institute of Chartered Secretaries and Administrators of Nigeria(ICSAN), Lagos State Chapter, Mr. Francis Olawale, said that for businesses to thrive, especially now that the economy is struggling, they must embrace corporate governance.

More education, he added, was still needed for people to imbibe the principle of corporate governance practice, noting that the impact has not fully been felt across sectors of the economy.

Saying that negative vices such as nepotism, corruption, and bribery, among others, have eaten deep into the fabric of the public sector, he added that if corporate governance is adequately explored, it guarantees sustainable development.

He said: “I am of the opinion that robust corporate governance is needed in the sector; if the sector must be revived to contribute immensely to the economy. There has been a lot of noise in terms of getting organizations to imbibe corporate governance in Nigeria, but there is need for more education for people to imbibe the principle.”

Good public administration, according to him, entails time-tested principles like disclosure and transparency in government operations and affairs, deepening of effectiveness and efficacy at all levels and institution of governance, prudent management of resources, equitable treatment of all citizens, and unwavering focus on welfare and security of the people.

The deputy managing director, Legal Services, Federal Airports Authority of Nigeria (FAAN), Mrs. Bridget Gold, who said that poor corporate governance mechanisms in companies have proved, in part, to be a major impediment to improving the competitiveness of firms, canvassed for enhanced corporate performance that can lead to higher economic growth.

“The best management practices adopted by the best managers cannot succeed in an environment characterised by poor governance. Shareholders and financial backers should be informed about how economic growth, social wellbeing and environmental care finds a proper believe in corporate strategies and operations,” she stressed.

On his part, senior partner, Phillips Consulting Nigeria, Paul Ayim, said, lack of regulatory framework and multiplicity of codes have not helped organisations on good corporate governance.

An Economist, Ilori Kayode, had said, despite all efforts by stakeholders to institute sound corporate governance practices, Nigeria has continuously fared poorly.

“We have observed how the lack of an effective corporate governance framework in Nigeria has been exploited by senior managements of companies at the expense of other stakeholders. More staggering is the recently unraveling of bad corporate governance practices,” he observed.

Former Director General of the Institute of Directors (IoD), Victor Banjo, said airlines struggled around the world, but the major difference between the local firms and their foreign counterparts was the place of good corporate governance in management and operations of the business.

Banjo, who is a former director at the defunct Virgin Nigeria Airlines, explained that corporate governance essentially addresses measures to manage and reduce financial and operational risks by building the integrity, transparency and accountability of a company’s board and management.

He said:  “it was not unusual to see Nigerian airlines collapse the offices of chairman and managing director in one person. Ditto for having one person as the manager and also a pilot, while wives and children are directors, and some not having board of directors or holding board meetings.”

Executive Secretary, Financial Reporting Council of Nigeria(FRC), Daniel Asapokhai, while speaking on the Nigerian Code of Corporate Governance 2018, said the Code would also enhance the integrity of the Nigerian capital market, by entrenching a culture of disclosure, transparency and accountability.

While believing that this Code will promote ease of doing business, attract local and foreign investments and enhance the integrity of the Nigerian capital market, by entrenching a culture of disclosure, transparency and accountability, he added that this Code will raise public awareness of good corporate governance practices.

The Nigerian Code of Corporate Governance, he said, has adopted the principle, which requires companies to apply the requirements of the Code and to explain how they did so.

The FRC boss said, the decision to adopt the approach was made after careful considerations of several factors including the Nigerian legal system, Nigerian culture and history, government policies, state of the Nigerian economy, global economic and political climate, and levels of capital inflow of investment coming into the country.

Corporate governance focuses on values such as integrity, accountability, transparency, full disclosure of financial and nonfinancial information, among others.

Good corporate governance is about having the correct policies and procedures in place. It is also about maintaining a culture where good relationships between stakeholders provide positive contributions to the long-term goals of the organisation.

Directors, company secretaries and managers can all make a significant contribution to good corporate governance.

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