Association canvass stronger corporate governance to manage COVID-19

Risk Management Association of Nigeria (RIMAN), has called for a deepening of corporate governance principles in Nigerian companies to help manage COVID-19 crisis, and alleviate its adverse effects on firms’ goals and objectives.

The Association noted that with the disruptions and high speed decision-making propelled by the current pandemic, there is a need to instil stronger corporate governance practice in companies to manage resultant risks.

According to the group, only organisations that get this right will flourish post-COVID-19, while those that practice poor corporate governance may not withstand the test of time.

Speaking during a webinar at the 20th Yearly General Meeting of RIMAN, themed: “Risk Management & Corporate Governance,” the Executive Vice Chairman, H Pierson Associates, Mrs. Eileen Shaiyen, stressed the need for company directors and senior managers to continually review their corporate practices to stay ahead of trends and ensure they align processes with the current reality.

“Entrenching a stronger corporate governance to manage risks in COVID-19 regime requires the board of directors to know when to step in and when not to; and how and when to engage in external activity, such as communicating with stakeholders, regulators, and others.

“The board acts as the ultimate stewardship body of the company, both guiding and supporting management in decisions around the fight for survival but also ensuring the company positions itself to emerge from crisis stronger and more resilient. It was indeed made clear that the board should understand that risk management is ‘a culture not a cult with a chief priest.”

She listed some of the key considerations that are critical for firms to undertake to flourish now and post COVID-19 are: stronger board and risk committee oversight, maintaining appropriate risk appetite, framework and metrics, high quality and timely information flow, regular mini board self-assessments among others.

“During a crisis, there is an expectation that membership of board risk committees is reinforced, boards and board risk committees would meet more frequently, there must be an efficient mechanism to get concise and timely risk information to all board of directors while ensuring that managing the risk and roles of the board and management becomes blurred.

“The risk management frameworks of many institutions are currently being tested. It is therefore necessary to revise the risk framework to cope with the new environment while aligning strategies with the new and projected environment.”

She added: “On the existing risk appetite metrics, management and board need to focus on metrics they can influence while they begin contingency planning on those they cannot influence.”