Your Excellences, Members of National Assembly here present, Distinguished Stakeholders, Members of the Press, Distinguished Ladies and Gentlemen (Adopt and stand on existing protocol)
Until recently, particularly in forums such as this, discussions around the subject of corporate governance were often dismissed as mere academic abstractions only fit for classroom debates. Part of the problem was the illusory theory of “Too Big to Fail”.
Captains of industry and Managers of large corporates with significant asset base thought that, like the Titanic, their vast business empires and large corporate ships were incapable of sinking. It was also difficult to see the causal relationship between weak corporate governance structures and the failure of corporate organizations.
Not anymore; in our lifetime and before our own eyes, nations once seen as formidable are sliding in and out of economic recessions, while multinational business concerns are failing at rates never witnessed in recent memory.
In Nigeria, our situation is even more precarious. Years of operating a mono product economy driven mainly by oil revenues, coupled with dwindling earnings from that sector and vicious attacks on oil installations, are pushing the economy to the brink.
Sadly, the common thread that runs through these failures, whether at the national or corporate level, is the absence of an effective corporate governance framework. It is fairly settled that without a robust corporate governance structure, corruption and arbitrariness thrive, progressively weakening the fibre and competitive edge of many organizations.
In the face of these stark and disturbing realities, the Federal Government for the first time since our journey to nationhood, is thinking outside the box. More than ever before, efforts are being made to diversify the economy by developing the real and non-oil sectors as viable options to a sustainable economy. Interestingly, the telecoms sector is leading the pack in the Federal Government’s determined effort in this regard.
The liberalization of the telecoms industry opened investment opportunities for both local and foreign companies, contributing significantly to the country’s Gross Domestic Product (GDP). To illustrate, in contrast to the economy as a whole which regressed to -0.36% in the first quarter of 2016, the telecoms sector contributed, in progressive and real terms, about 8.83% to the GDP in the same period. This represents an increase of 0.5%, relative to the growth in the last quarter of 2015.
Similarly, apart from attracting Foreign Direct Investments (FDIs) in excess of $38 Billion and reflating the economy, the telecoms value chain (formal and informal) continues to create a significant number of job opportunities for our teaming youths. Other positive spin-offs include increasing local content and rising income per capita/per head for employees in the sector.
As the Sector regulator, why are we not resting on our oars and basking in the glory of our widely-documented successes? The answer is simple; we are committed to sustaining and building on the formidable structures established over the years for the industry to thrive and outlive us. We desire an industry that will grow bigger, better and be more relevant to successive generations. This is the real essence of our meeting today; to share our thoughts and perspectives on how to meet our commitment to the principles of inter-generational equity in the sector; how we can leave a lasting legacy of a strong and virile industry, fit for bequest to successive generations.
In recognition of the need to sustain the phenomenal success recorded in the industry and replicate the lessons learnt in other sectors that had gone through the “Boom and Bust” cycle, the Commission in 2012 set up a multi-stakeholder Corporate Governance Working Group (CGWG) with membership drawn from across the Nigerian telecoms industry, the Commission and Corporate Governance practitioners. The mandate of the Group was to determine the industry’s corporate governance needs and the best approach to be adopted in addressing them. The CGWG developed the Code of Corporate Governance for the telecoms industry, which was published in 2014.
The Code consists of 12 principles and was developed to protect the interest of investors and stakeholders in the industry, as well as promote time-valued principles of accountability, responsibility, transparency, integrity and ethical conduct.
No doubt, the Code has expanded the frontiers of accountability in the operation of companies in the sector. However, challenges still exist. For instance, the Code is declaratory in nature and implementation was initially voluntary across the industry, leading to violations.
While compliance with the provisions of the industry Code was initially made voluntary for a period of 1 year, which has since lapsed, the Commission is gradually moving towards a regime of stricter compliance.
To this end, the Commission recently carried out an industry study to assess the level of compliance with the Code. Part of the process of moving from a voluntary compliance regime to a mandatory era is exactly the reason for today’s forum.
This meeting essentially is a consultative forum designed to engage industry stakeholders and the public with the outcomes of the study, with a view to retooling the sector corporate governance structure for greater efficiency. Our expectation is thatat the end of this forum, we will jointly agree to move from the voluntary compliance era to a mandatory compliance regime.
The truth is, there are many companies/products that we can learn from their experience. We can make our industry and products better, stronger and sustainable by strict compliance with corporate governance frameworks.
As we ponder on this, it is will be our joy that in the next 200 years, operators such as Airtel, Etisalat, Glo, MTN, Natcom and all other licensees of the Commission will continue to exist and be vibrant.
I wish all of us fruitful deliberations.
Prof U.G. Danbatta