By Providence Emmanuel
THE Institute of Chartered Secretaries and Administrators of Nigeria, ICSAN, has called for effective shareholders’ engagement to enhance the credibility of organizations and thereby facilitating a better understanding between the stakeholders and board of directors of companies. This formed the submissions of discussants and presentations at the 2017 ICSAN Annual Conference in Lagos with the theme: “The Agency Dilemma – The Impact of Stakeholders’ Engagement.”
Some of the conclusions reached at the conference include a review of voting at Annual general meetings, AGM; Institutional shareholders from particular sectors (Insurance Industry, Pension Industry, Foreign Investors, Accounting Bodies) should be given specific slots at AGMs to ask questions and make comments;
The Securities and Exchange Commission, SEC, and the Nigerian Stock Exchange, NSE, should do more to ensure best practices by listed companies; and institutional shareholders should find time to fully understand regulations as set out by the SEC and NSE while serving as corporate governance watch dogs over the companies they invested in.
Speaking at the event, national coordinator, Independent Shareholders Association of Nigeria (ISAN), Mr. Adeniyi Adebisi, said it is the duty of all stakeholders to be involved in decision making considering that the rule of law, accountability and transparency is the guiding principle which should be adopted by all.
“If this is done, it will be difficult to serve any other interest outside the interest of the company and the interest of the shareholders. There is really no difference between an institutional shareholder and other class of shareholders whether big or small or retail. The expectation is the same, to receive good return on investment,” he said.
According to him, dilemma arises when the directors have to take a decision on critical issues bordering on the interest of the company as an entity, the interest of shareholders and the personal or selfish interest of the directors.
Head, Investment research and Corporate Strategy, Stanbic IBTC Pension Managers Limited (SIPML), Mr. Charles Omoera, who was co-speaker at the conference, also pointed out that increased engagement with shareholders over the last few years with regular yearly AGM and quarterly analyst calls are not enough.
He highlighted some of the benefits of having effective shareholders’ engagement to include companies divesting under-performing businesses and changing board or company strategies.