Experts have recently convened at the Lagos Business School to discuss the pressing need for improved corporate governance culture in Nigeria. Significant concerns arose regarding financial mismanagement, corruption, and a lack of transparency, particularly affecting small businesses. Professor Ajogwu presented the AFG Model, advocating for a balanced approach that emphasizes ethical responsibilities alongside profitability, highlighting the dynamic nature of effective governance frameworks.
In Nigeria, past efforts to address corporate governance culture have revealed that poor governance remains a persistent challenge affecting economic stability. Recently, prominent governance experts convened at the Lagos Business School to explore this pressing issue. The discussions unveiled critical insights about the state of corporate governance in Nigeria, calling for elevated standards and practices within organizations.
Experts have observed a troubling trend where companies that prioritize rapid growth often neglect essential governance practices. This neglect has contributed to financial mismanagement and diminished trust among investors, underscoring the dire need for robust governance frameworks to restore confidence in Nigerian businesses. The Corporate Finance Institute defines effective corporate governance as comprising the principles that direct and control an organization, emphasizing its importance for all business operations.
While larger firms may more easily implement superior governance standards, small businesses often struggle to adopt such practices, leading to high failure rates before their fifth anniversary. This disparity is a significant concern, as effective governance is crucial for national development and organizational success. Thus, the prevailing governance challenges, such as corruption and weak regulatory enforcement, continue to hinder economic growth across Nigeria.
Historical incidents of financial misconduct, such as the Cadbury Nigeria scandal and the collapses of various banks, exemplify the consequences of poor corporate governance. These instances led to severe financial repercussions for investors, employees, and the broader economy, emphasizing the urgent need to enhance governance practices in corporate entities to prevent such tragedies in the future.
The recent lecture by Professor Fabian Ajogwu, a leading authority on corporate governance at the Lagos Business School, centered on the newly introduced AFG Model. This model aims to foster better governance practices that address the realities facing modern corporations. During the public discourse, he also presented his latest book, “Reflections on Corporate Governance,” which serves as a comprehensive guide for navigating the complexities of governance.
Dr. Peter Bamkole, Deputy Vice Chancellor of Pan-Atlantic University, highlighted the pivotal role of corporate governance, stating that it represents the foundation of responsible leadership and sustainable economic success. He conveyed the importance of balancing profitability with ethical decision-making and transparency as vital components of effective governance.
Professor Juan Manuel Elegido noted the common misconception of corporate governance as merely a checklist of compliance. He emphasized that it ought to inspire accountability, transparency, and trust within corporate cultures. The Chairman of Stanbic IBTC Holdings Plc, Sola David-Borha, echoed similar sentiments, emphasizing the integral role of individual character in upholding governance principles.
Ajogwu’s presentation brought forth the understanding that the landscape of corporate governance is continuously evolving, driven by changes in global business practices, regulatory expectations, and public demands for accountability. He stressed that organizations should advance beyond mere financial considerations to embrace a broader purpose, including ethical responsibilities to stakeholders and the environment.
The AFG Model promotes good governance practices grounded in integrity, fairness, and accountability. Ajogwu contended that effective governance extends beyond compliance; it must align with a higher purpose that actively considers the impact of businesses on society. This view redefines profitability as part of three primary business drivers, alongside social responsibility and ethical governance.
Ajogwu argued for a shift in focus from solely profit-driven motives to a model that recognizes the intertwined nature of people, the planet, and purpose. He emphasized that a comprehensive governance framework must integrate the rule of law and combat corruption, which can detract from ethical leadership.
The discussions at the Lagos Business School have rekindled vital conversations regarding corporate governance in Nigeria, highlighting the urgent need for enhanced transparency, accountability, and ethical practices within organizations. The AFG Model, introduced by Professor Ajogwu, provides a framework for businesses to adopt a more balanced approach that prioritizes not only profit but also social responsibility and sustainable practices. Addressing issues such as corruption and ineffective governance structures is essential for restoring investor confidence and fostering economic growth in Nigeria.
Original Source: www.thisdaylive.com
