‘Corporate governance key to survival in recession’
Corporate governance remains a crucial element for the survival of companies and nations in a recessed economy. This was the position of speakers at the 2017 roundtable on corporate governance organised recently by the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) in Lagos.
Leading the discourse with the theme, “The importance of corporate governance in a recessed economy,” the Head of Strategy, First Bank Holdings Plc, Folarin Alayande noted that recession leads to greater advocacy for transparency, with activists challenging board decisions and exerting pressure on managements to perform.
He stated that a robust corporate governance structure leads to enhanced resource utilisation in the private and public sectors. Alayande said this would improve efficiency in resource allocation across the economy, thus leading to a faster route out of the economic recession.
His words: “Economic history of the last six centuries suggests to us that in periods of economic recession or depression, capital flows towards regions or countries or industries of relative stability. Indeed, empirical evidence suggests that the performance of corporate governance is significantly negatively correlated to economic growth, indicating that most of the advances we have witnessed in the field of corporate governance have been at the cusp of economic recessions.”
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