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‘Media houses must adopt good corporate governance strategy in disruptive era’

By Sunday Aikulola
06 September 2022   |   4:08 am
Dr. Pius Onobhayedo of the School of Media and Communication, Science and Technology, Pan Atlantic University, Lagos, has said it is essential for media houses to adopt the right corporate governance strategy..

Pius Onobhayedo

Dr. Pius Onobhayedo of the School of Media and Communication, Science and Technology, Pan Atlantic University, Lagos, has said it is essential for media houses to adopt the right corporate governance strategy to remain relevant in today’s disruptive world.

Speaking at the Nigerian Guild of Editors (NGE) workshop in Lagos recently, he noted that the importance of right corporate governance could not be over emphasised.

With the theme: ‘Journalism and Digitalisation: The Imperative of Good Corporate Governance’, he said media houses that ignored good corporate governance should prepare to face collapse sooner than later.

He cited The U.S. cable TV operator, Adelphia, that was driven into bankruptcy in 2002 and its controlling family forced out of the company following disclosures of questionable financial transactions between the company and family members.

He also made reference to Time Warner, in 2004, which agreed to pay $510 million in fines to settle charges of securities fraud involving accounting irregularities.

According to him, “in November 2001, Enron Corporation admitted that it has been inflating its income by approximately $586million since 1997. In December of same year, Enron filed for bankruptcy with its stock closing at $0.26 (down from $90.56 in the year 2000). Faced with such a mega-scandal among others, discussions on the need for good corporate governance became particularly prominent globally.”

He argued that corporate governance effectiveness needed to be interrogated in the context of digital era.

Today, he said, it is clear that many of the world’s most successful companies operate as digital platforms. The term, digital platforms, he explained, refers to a type of platform that serves as a standardised digital interface and utilises digital technologies to facilitate interactions between different parties.

He added that digital consumers are not only empowered to enjoy device and formats convergence, they even want to have a say in the innovation roadmap of the organisations.

To him, “the customers seem to sense quickly the possibilities occasioned by technological advancements and want to leverage on them.”

He noted that companies leverage on digital media convergence, which has led to increase in the number of platforms that have been steadily disrupting multiple industries, including media, retail, hotels, taxis, and others, and are aggressively moving into new sectors, such as financial services.

Defining corporate governance as the way organisations are directed and managed, he stressed the need for media organisations, among others, to learn from the innovative big tech firms that have risen to the top of the chart among the world’s most capitalised companies.

He identified such tech giants as Amazon, Apple, Facebook and Google. Common to these companies that are digitally converging services, he argued, is the understanding that the digital customer is being increasingly empowered to be a ‘prosumer’ (producer-consumer) and that this empowerment influences to a large extent the rules of engagement.

Asking, how can ‘good’ corporate governance be achieved? Onobhayedo said a governance approach that simply equates ‘good’ with ‘shareholder returns maximisation’ could result in an operational tension between the need to foster innovation and the need to yield quick returns.

He also advocated a shift in mentality from classical ‘Corporate Governance’ to ‘Platform Governance.’

This mentality, he explained, is quite fitting for today’s media organisations, who increasing face competition, not only from among themselves but also from among other ‘platform companies’ that are relentless in eating into the value-chain of media organisations.

He added that there is a very thin line in the digital world between service organisations that have digital information flow as the currency between content producers and content consumers.

Onobhayedo, however, advised media companies to focus on governance strategy that is concerned with how firms could organise now for success tomorrow. What they should do now to innovate and remain successful in the future; what kind of structures, practices and processes will best equip the firm to continually reinvent itself, its products and its services; and how they can leverage new digital technologies to maximise their performance and capacity for innovation.

He noted that these concerns could hardly be strategically addressed without requisite knowledge or competency at the board level, where corporate strategy is established.

In addition, he said, the regulatory agency also needed to be aware of these concerns and the need to give directors adequate breathing space to operate with requisite innovative agility.

Further, he suggested the media and all businesses, to reinvent themselves as platforms. By operating as platforms, he said many companies hope to build their capacity for disruptive innovation and ensure that they remain relevant. He added that established and ‘traditional’ companies must also undergo this transformation.

With foundation on the blockchain, which in turn is founded on a peer-to-peer architecture that overlays the Internet, he said the world is entering a stage in which the user as infrastructure providers on the peer-to-peer network, could be more closely associated with their service providers of choice.

He added that users would likely experience stronger transaction-driven engagement, through tokens issued by the providers of the Decentralised Applications (DApps) that run on the blockchain.

He projected, “these realities could have significant influence on the nature of governance in response to user demands. It is therefore not surprising that the concept of Decentralised Autonomous Organisations (DAOs) has quickly emerged alongside DApps.”

Conclusively, he said: “My prediction is that DAOs will become more attractive to users as technology innovators simplify the onboarding steps. The Media should expect some significant disruption in the way content users consume content, how they interact, and how users engage with their preferred organisations.”