Nigeria: Upholding Corporate Governance in Telecoms

14 November 2019

The need for telecoms operating companies to uphold their corporate governance code is necessary for the purpose of transparency, business growth and continuity, writes Emma Okonji

The Nigerian Communications Commission (NCC) had, in 2016, revisited the telecom industry Code for Corporate Governance and allowed telecoms operators the liberty to operate it as non-mandatory code for a period of one year. In 2017, the NCC made the code mandatory and since then, the implementation has been smooth, designed to create transparency and business growth in telecoms industry. One of the key items in the Code is that the offices of Chairman and that of the CEO shall not be occupied by one person concurrently in any telecom company in Nigeria. In addition, no one can serve as a director in any telecom company for more than 15 years.

MTN as an example

The listing of MTN Nigeria on the Nigerian Stock Exchange (NSE) Premium Board earlier in the year marked a turning point in the historic entry of the telecommunications sector into the Nigerian capital market. Beyond opening up the economy for massive job creation when it first commenced business in 2001, MTN Nigeria was, on May 16, 2019, listed on NS). It was the first telecoms network provider to be listed in that category.

The NSE Premium Board is a listing segment for the elite group of issuers that meet the exchange's most stringent corporate governance and listing standards. By that feat, MTN Nigeria joined the league of seven NSE Premium Board members: These include Dangote Cement Plc, FBN Holdings Plc, Zenith International Bank Plc, Access Bank Plc, Lafarge Africa Plc, Seplat Petroleum Development Company Plc and United Bank for Africa Plc. This stands MTN Nigeria out for compelling excellence in corporate governance.

Besides blazing a trail for telecoms companies to be quoted on the NSE, thereby transforming part-ownership of the company to Nigerians, MTN Nigeria which was listed by introduction of 20.35 billion ordinary shares at N90 per share, MTN added N1.84 trillion (about $5 billion) to NSE market capitalisation. This, ultimately makes it the second largest stock by cap on NSE. As at today, MTN Nigeria tops the 170 listed companies on the NSE - by revenue.

As a rule, Premium Board listing is a sign of commitment to strong corporate governance, excellence, professionalism, efficiency in service delivery and providing increased returns to shareholders. It is a landmark status which will single MTN Nigeria out as a public quoted telecommunications company with high ethical and professional standards . As the Chief Executive Officer, NSE, Mr. Oscar Onyema, said: The listing will promote liquidity for MTN Nigeria, enhance its value and increase transparency."

Commitment

Conscious of its commitment to the investing public and to Nigerians generally, it behoves MTN Nigeria to constitute a board of eminent personalities with impeccable pedigree in corporate governance as well as professional integrity to drive its long-term values. This will guarantee optimum returns to stakeholders as well as foster people oriented corporate social responsibilities driven by adequate 'local content' in indigenous capacity.

The recent reconstitution of the Board of Directors of MTN Nigeria, therefore, is a veritable example of how best to appreciate local human resource. In its less than two decades of operation in Nigeria, MTN has made it a point of duty to appoint capable Nigerians to its Board. The last board was headed by Dr. Pascal Dozie as chairman with the likes of Gbenga Oyebode, a corporate czar and Tunde Folawiyo, a scion of the legendary Folawiyo dynasty and an astute entrepreneur in his own right.

The succeeding and current Board is no less stellar in its membership. Chaired by Dr. Ernest Ndukwe with membership that includes: Mrs. Omobola Johnson and Mrs Ifueko Omoigui-Okauru, these very accomplished Nigerians do enormous credit to both MTN and Nigeria. It affirms the company's belief in the capacity of Nigerians thereby engendering faith and trust in Nigeria and its citizens. Other eminent Nigerians on the board include Mr. Andrew Alli and Mr. Muhammad Ahmad.

President, Business Renaissance Group, Chief Omife Omife, while addressing journalists in Lagos recently, said adherence to corporate governance code by telecoms operators, would continue to showcase Nigeria as a country blessed with abundant human capital and underscores the truism implicit in the patriotic refrain of brand Nigeria pay offline - "Good People Great Nation". It also demonstrates gender sensitivity in a most noble manner that is devoid of mere tokenism stemming from affirmative action. This is because the two Nigerian women, Omobola Johnson and Omoigui-Okauru, recently appointed to the MTN Nigeria Board, unarguably, rank among the brightest and most accomplished Nigerians alive today.

According to Omife, "undoubtedly, MTN Nigeria's approach is a radical departure from what has plagued the Nigerian business environment over the years where foreign nationals dominate the Boards of major multinational companies operating in Nigeria to the exclusion of Nigerians. As a matter of fact, the nation's recent corporate history is replete with some of the best-known and respected corporations that have operated within the shores of Nigeria for many years, some as long as over 50 years.

"It is interesting to note that some of these companies, especially the multinationals, still operate in Nigeria with membership of their Boards skewed in favour of non-Nigerians. Indeed, most of these notable multinationals have only recently, under compulsion, deemed it expedient to enlarge their Boards of Directors to include Nigerians.

Under such a climate of extreme reluctance on the part of these notable corporations, some of whom have become synonymous with reserving for themselves a large chunk of the nation's cake, which truth told, they helped to extract and bake, it will always be a thing of joy whenever a notable corporation opts for greater inclusion that appreciates the abundance of talents in its area of operation."

It is as clear as crystal that the appointment of these distinguished Nigerians to the MTN Board, in no way, detracts from equity and fairness.

"If anything, their appointment is indeed a masterstroke by a visionary multinational corporation to harness the best of available local talent to further the ends of its noble objectives. All things considered, this will serve the best interest of Nigeria and Nigerians. It is apparent that their appointment in no way ran afoul of any known law, business ethics and corporate governance rules cum guidelines, Omife said.

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