Revitalizing Corporate Governance in Nigeria: Insights from Experts

Experts convened at the Lagos Business School to discuss Nigeria’s corporate governance challenges and introduced the AFG Model, a framework aimed at promoting responsible business practices. Key issues highlighted include poor governance leading to financial mismanagement and corruption. The discussions underscored the need for an evolved governance approach focused on ethics, transparency, and social responsibility, as proposed by Professor Fabian Ajogwu.

In Nigeria, a country marked by struggles with corporate governance, recent dialogues at the Lagos Business School featuring esteemed governance experts might serve as catalysts for meaningful reform, as reported by Festus Akanbi. Observers agree that poor corporate governance remains a persistent issue contributing to the overall challenges faced by businesses in Nigeria, often manifesting as financial mismanagement and diminished investor trust.

Corporate governance encompasses the rules and procedures that guide a company’s direction and oversight. Its efficacy is paramount for business success, informing conduct within organizations and shaping operational trajectories, per insights from the Corporate Finance Institute. While larger firms may find it easier to establish sound governance practices, smaller companies frequently find this a formidable challenge, often leading to premature business failures.

The necessity for good governance is universally recognized as essential for a nation’s progress. In Nigeria, both the elite and general populace acknowledge governance’s pivotal role in shaping national outcomes. Yet, issues such as corruption and weak regulatory frameworks obstruct necessary advancements in corporate governance, thus stunting economic growth and undermining investor confidence.

Recent years have illuminated the detrimental consequences of inadequate corporate governance, including rampant corruption and financial mismanagement, leading to extensive losses for investors and other stakeholders. Notable instances of fraudulent practices, such as the Cadbury Nigeria scandal, have exemplified the crisis of trust in the corporate sector, further compounded by bank collapses linked to malpractices.

The repercussions of poor governance extend to job losses and pension mismanagement, as observed in various scandals, engendering a business climate rife with challenges that impede innovation and economic vitality. Addressing these critical issues spurred a public discussion at the Lagos Business School, where Professor Fabian Ajogwu unveiled the AFG Model—a framework designed to assist organizations in navigating contemporary governance challenges.

During the public lecture titled ‘Balancing Power, Profit and Purpose,’ Dr. Peter Bamkole, Deputy Vice Chancellor of Pan-Atlantic University, emphasized corporate governance’s foundational role in fostering responsible leadership and economic sustainability. He asserted that Ajogwu’s insights present a vital practical guide that can equip professionals with the wisdom to navigate governance complexities.

Prof. Juan Manuel Elegido, a prominent figure in academia, elaborated on the need to approach corporate governance beyond mere compliance, urging readers to recognize its broader implications for organizational culture. Sola David-Borha, Chairman of Stanbic IBTC Holdings Plc, drew attention to the character of individuals responsible for governing, emphasizing that integrity is central to the effectiveness of corporate governance practices.

Ajogwu highlighted the increasingly unstable business environment, suggesting that effective corporate governance is indispensable for long-term success. He articulated that evolving definitions of good governance must address contemporary challenges, advocating for a more comprehensive focus on environmental, social, and governance (ESG) considerations alongside traditional business metrics.

In his discourse, Ajogwu articulated the necessity for organizations to redefine their focus, urging a shift from a profit-centric approach to a model that encompasses ethical responsibilities and societal impacts. This includes integrating the ‘4 Ps’—people, planet, purpose, and profit—into corporate decision-making frameworks.

He argued that for such a model to be viable, the reinforcement of the rule of law and anti-corruption measures is vital. He proposed that the rule of law fosters an environment where ethical governance can thrive, allowing for accountability and fairness in corporate practices, while actively combating the culture of corruption that undermines growth and institutional credibility.

In summary, the ongoing discussions regarding corporate governance in Nigeria highlight significant systemic challenges that hinder economic progress and investor confidence. The insights shared by experts during the recent forum at the Lagos Business School call for an evolved understanding of governance, shifting the focus away from mere profitability toward a more comprehensive approach that includes ethical responsibilities. Implementing frameworks like the AFG Model can provide the necessary tools for organizations to foster a culture of integrity and accountability, essential for sustainable growth and development in Nigeria’s corporate landscape.

Original Source: www.thisdaylive.com