Expert links good governance practice to business success
The Chief Audit Executive, Union Bank Plc, David Isiavwe, has said proper governance practices could lead to business success and increase in returns on investment (RoI).
Speaking at a business lunch, organised by Business Club Ikeja recently, he said: “many believe that only public companies or large, established companies with many shareholders need to be concerned about, or can benefit from implementing good governance practices otherwise generally referred to as Corporate Governance. The reality is that all companies – big and small, private and public, early stage or established compete in an environment; good governance is a business imperative. One size does not fit it all, but right-sized governance practices will positively impact the performance and long term viability of every company.”
With the theme: “The impact of good governance practices on business success,” he added that companies with good governance practices remain in business in the long term while companies with poor governance practices ultimately collapse sooner or later.
According to him, benefits of good business practices include the provision of greater level efficiency, reducing liability, attracting competent management, preference by investors and regulators, building reliability and sustainability and protection of investor and capital.
He identified governance issues facing businesses as leadership problems; unethical practices by Board, management and staff; lack of transparency; conflict of interest; lack of succession planning; and inadequate induction and assessment of directors;. Others are ineffective governance mechanisms for example lack of Board Committees or Committees consisting of few or a single member; lack of independent Board and audit committee members for example a situation where a Chief Executive Officer plays a multiple role in various committees.
Conclusively, he said good governance in business is needed particularly for the effectiveness of boards and the impact on organisational performance.
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