Corporate governance and proper succession planning has been identified as a key driver for the survival of indigenous companies.
The Group Managing Director of Dangote Industries Limited, Mr. Olakunle Alake, made the assertion in Lagos, while delivering a paper titled “Corporate Governance and Succession Planning,” at the 35th Omolayole Management Lecture Series, organised by AIESEC Alumni Association recently.
Alake, also said the absence of sound corporate governance structures and good succession planning was the reason indigenous companies hardly outlive their founders.
He added that many great indigenous businesses collapsed partly because effective corporate governance structures and succession processes were not put in place to ensure that these businesses were sustained.
According to him, “for businesses with poor corporate governance structures, the founder is often the chairman and the chief executive, and made all decisions.
“They believe in owning all without a thought for tomorrow. He alone has the vision, energy, strategy, and ran the business. When the man dies, the business dies.”
Alake, however, pointed out that with a good board, sound corporate governance structures and proper succession planning, the founder could retire without looking back, adding that the company would continue to thrive because there would be transferred vision and goals.
“There would be effective corporate governance and shared operational sustainability. These are fundamental reasons why a business must have a proper and effective board.
“As Chairman/Managing Director of Unilever Plc, he (Dr. Michael Omolayole) initiated a succession system that groomed and trained Nigerians for top positions.
“He was a stickler for sound and strong corporate governance, which to him is of more importance than immediate gratification. Today, he is rewarded for his tenacity with the longest annual running lecture series in management being held in his honour,” Alake added.
Earlier in his remarks, the President and Chairman, Nigerian Institute of Management (Chartered), Prof. Olukunle Iyanda, noted that good corporate governance was extremely necessary for building trust in corporate Nigeria
According to Iyanda, currently, Nigeria is facing a trust deficit that is cutting across both public and private sectors — this trust deficit is due to the abuse of trust and has to be rectified through good corporate governance.
He affirmed that good corporate governance practices were fundamental to a company’s success, enabling access to capital, mitigation of risks and safeguard against mismanagement.
Also, in her welcome address, the President of AIESEC, Brenda Nwagwu, noted that the lecture series had served as a veritable source of quality management education and insight for Nigerian professional managers.
Nwagwu added that Omolayole was an epitome of integrity and professionalism who played a significant leadership role over the years in the industry.
She, therefore, called on all Nigerian corporate managers to emulate his virtues and corporate governance principles, while lauding Dangote group for their strategic corporate governance and succession plans