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Capitalism must be balanced with social impact – Niyi Adenubi

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The Executive Director, Institutional Business and Investor Relations, at VFD Group, Niyi Adenubi recently sat for a chat with Chinasa Ken-Ugwuh on her radio show called Social Conscious with ‘Nasa hosted on Africa Business Radio. The focus was on the 21st century capitalists’ dilemma: Social Impact or Profitable Value Creation. The conversation also featured ex-Diamond bank GMD and Chief Sparkler at Sparkle, Uzoma Dozie.

As today’s corporate executives build and the world changes more and more, it has become apparent that the capitalism as practiced from eons may not be suitable for the yonder. ‘’You have to balance economic prosperity and social development to take all stakeholders into consideration,’’ Niyi says.

Enjoy excerpts:

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Who are the most critical stakeholders in your view – are they the customers and employees?
I think customers and employees are critical stakeholders. I totally agree. The most critical stakeholders are your customers because customers are directly correlated with your profitability. If you cannot serve your customers right, they will go somewhere else, and you will be losing money. They are always the number one. But a very close second in our company, is our employees. And it is very important especially now that we are hiring young people. We have graduate trainees’ programmes. These people come to us straight from the university. Millennials and Generation Z are very different in terms of their aspirations. So, it is very important for us to start building our own culture in our company to manage them so that they can be optimal. We also have a minimum pay structure – one that ensures that every one that works in VFD earns a certain minimum. This is very important. Of course, our regulator is quite important too and on the last but not the least are our capital providers – bankers, equity providers and shareholders – they are very important too.

How is VFD reacting to investors’ expectations on capitalism?
I think the investors are ready for this change. COVID has accelerated the pace for most people. The days of running a business primarily and solely for shareholders are gone. I think even employees demand that we are socially conscious. When we started our ESG program at the company, it was to make our internal stakeholders happy and we have been pushing for this for a long time. Ever since we became quite successful, we have been able to give back and that has encouraged our staff to give more in some of the things we do. On the social and governance side I think we have done quite a lot in our organization.

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Do you believe in stakeholders’ capitalism over shareholders capitalism? Do you agree with the idea?
I sincerely believe in it. About six or seven years ago, I read this book by a French Economist, Thomas Piketty, called ‘’Capitalism in the 21st century.’’ It was basically the summary of what is now trending and which the world is going through. We see more poverty, more famine, more climate change dislocating more farmers, more inequality in the world. For me, that was a wake-up call personally. It suggested that the world was returning to an age where the middle class is being eradicated.

I just picture a world where, for example, Nigeria, where the inequality is just so wide, that there will be security issues as we have now. At VFD Group we are very conscious to educate our shareholders of the importance of all stakeholders’ management; for example, the environment in which we are operating must benefit directly from what we are doing. Our staff must be directly beneficial both from the point of salary and profit sharing and from the general standard of living. We will not squeeze ourselves just to maximize or earn an extra dollar. All those things are very important to me since I came to that actualization six or seven years ago, I have tried to incorporate them in the policies that shape the Group’s ESG and CSR policies.

At the point when you started to think like this, was there any resistance and how did you try to persuade them?
Yes, I think there is always resistance to change. But in my situation, there was none. It was quite logical.

Just look at the calculation that we did. On the return on capital, we always exceed the growth rate of the economy which means that richer people will go in a certain direction and if you don’t incorporate the right policy you will be squeezing the middle and getting more people poorer. So, it was not that hard to do and even on the investors’ relations side, even our local investors are aligning to the ideas. So, it has not been that difficult and with COVID we have pushed more in that direction.

Most corporate leaders are moving into philanthropism these days. Do you think that there is capitalism agenda behind this CSR?
I think there is a way that the world works and until we find a better way, we just have to use it. So, I completely understand what you are saying.

If I give money to a cause just because I want something back in return and if that is the motivation for me to do well and make that cause to happen, that will be my legacy. It is not bad. I particularly like the kind of philanthropy that is done in America. Americans give more money than anybody in the world. They also make more money than any body in the world. When they build a new hospital or when they build a new library or research center in a university, they want it name after them or stuff like that.

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What is your view on socialism?
I do agree that this is the period we should wear our socialism tag. At the height of the lockdown, it was very obvious that in a place like Nigeria where there are no social safety nets, asking people to stay at home while they are can’t feed, and their children are crying and dying, will make them become aggressive. And I believed the fallout of the #ENDSARS protests was as a result of that. We need to have a more balanced approach in handling problems. For me, I believe that more Nigerians are dying of hunger than are dying of COVID-19.

On CACOVID’s Covid-19 interventions
I think the identification project is a very crucial one. The BVN project was a big one too. Once we get identification right in the country, that should solve a lot of our infrastructural problems in terms of identifying people to give them the palliatives or to send money to their accounts and to avert all those other disasters that happened to CACOVID. The uproar surrounding CACOVID could have been avoided if we had a way of identifying ourselves.

Do you find that your value, vision, and mission at VFD addresses all the stakeholders?
At VFD Group, our mission statement says in part about building a socially conscious ecosystem from the environment that we are operating. It is top priority for us as I said.

Our stakeholders are quite excited about it. Our customers are quite excited about it; our employees are quite excited about it and our shareholders are excited about it. It has always been a very conscious and deliberate thing for us.

One part of it is to have this statement, how does it translate into the culture?
We have this recurring strategy sessions where we set goals for the organization. We are a goal setting organization. Every year, we ask what we want to achieve that will be in line and in tune with our mission statement. We list them and through the course of the year, we evaluate for execution. We carry everybody along that helps us.

How else are you able to demonstrate this value apart from goal setting?
Our values are innovation, integrity, teamwork, and newly empathy. I would like to talk specifically on empathy. We had a strategy session in 2018 or thereabout to prepare for the new year and empathy generated a lot of debate in the organization amongst everybody.

The whole idea when we were pushing for empathy as a value is that it should drive our business. The key thing is if you can put yourself in the shoe of the other person either customers or another colleague or your regulator or your auditor and understand where they are coming, from there is less friction and it solves the problem. Our work is about providing solution.

If a customer calls and you answer the phone and maybe cannot solve the problems at that point because you don’t work directly in that business. For example, a customer calls for something with V Bank and the person that answer the call works with the Asset Management subsidiary, it is expected that you attempt to solve the problem before transferring in a professional way. Empathy does not mean that you are soft or vulnerable.

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