The Financial Reporting Council of Nigeria (FRC) and its partners have launched the Small and Medium Enterprises Corporate Governance Guidelines (SME-CGG) to ensure business sustainability beyond their founders.
FRC launched the Guidelines in collaboration with Integrity Organisation, UN Global Compact Network Nigeria and sponsored by MacArthur Foundation in Abuja.
Dr Rabiu Olowo, Executive Secretary of FRC, at the issuing and unveiling of the guidelines, said that SMEs contribute over 50 per cent to the GDP of the country.
It also employs millions of citizens who are instrumental to innovation, fostering entrepreneurship and growth.
Olowo further said that unlocking the potential of SMEs required good corporate governance practices,involving a structure through which objectives of a company were set.
‘SMEs are an incredible sector to improve growth, reduce poverty, and promote social progress.
‘We believe that governance to SMES is very key. There is a myth that the problem of SMEs is finance, which is
not entirely true.
‘A well ran SME is well governed with the principles of succession planning, risk management well put in place which will promote the ability to live in the future.
‘We believe that with this SME-CGG, SMEs will live beyond their founders and this document will go a long way to contribute to the future of our SMEs,’ he said.
Key components of the SME-CGG, Olowo said, included a board structure and responsibilities, risk management,corporate governance policies and procedures,financial oversight, and stakeholder engagement.
Other components, he mentioned, were ethical conduct and compliance, succession planning and family-owned enterprises.
The executive secretary added that the guidelines were not mandatory, but would be a key distinguishing factor to access capital, living in short, medium or long term.
‘Looking at all of these,even without its mandatory feature,I believe it is a must have for every SMEs.
‘By adopting these guidelines, SMEs will be better positioned to attract invest
ment, build trust with stakeholders, and enhance their competitive edge.
‘The launch of the Nigeria SME-CGG is an opportunity to set a new standard for how our SMEs are run, ensuring they are well-equipped to compete on a global stage,’ Olowo said.
He called on the relevant stakeholders to embrace the guidelines and remain committed to its implementation.
Ms. Ayotola Jagun, Co-Thematic Lead, Anti-Corruption and Governance, UN Global Compact Network Nigeria, said that partners working in synergy could create an ecosystem where responsible business practices and sustainability were not ignored.
‘The future of the Nigerian economy rests on the shoulders of these SMEs and by empowering them to be committed and ensure sustainability, we can create a future that is prosperous,equitable and environmentally conscious.
‘I urge SMEs and relevant bodies to adopt the SME-CGG to achieve the Sustainable Development Goals,’ Jagun said.
Mr Soji Apampa, Chief Executive Officer of Integrity Organisation, said the guideli
nes created an opportunity for SMEs to access incentives for their businesses.
Mr Osita Ede, Head of Finance Service Cluster, Lagos Chamber of Commerce and Industry (LCCI), said that apart from business capital, investors were also interested in a good governance structure of a business.
‘Investors are interested in companies raised on a good track record, equity,a good team, a clear vision and commitment to responsible practices.
‘Good governance enables businesses to equally help SMEs to demonstrate these qualities,’ he said.
Ede, also Chief Product Officer of Fidelity Bank, pledged LCCI and the bank’s commitment towards creating more awareness on the SME-CGG.
He said that Fidelity Bank was putting measures in place to launch Fidelity SME hub, a one-stop shop for SME solutions.
Ede added that they would incorporate the SME-CGG in their capacity building programmes.
Mr Oryiman Alu, from the Small and Medium Enterprises Development Agency of Nigeria, said that the problems of SMEs included access to f
unding, insecurity,among others.
Alu said there was the need to engage stakeholders at the state levels to be part of the national programme aimed at improving businesses of SMEs, encourage inclusivity and addressing their challenges.
Source: News Agency of Nigeria