It’s being increasingly recognised that well-governed enterprises are not only good for their stakeholders, but also more broadly “contribute a huge deal” to the growth of economies in Africa and elsewhere, say corporate governance experts Funke Alabi and Tracy Idemudia. 

“Corporate governance is very significant to economic development,” commented Idemudia, an associate at award-winning Nigerian firm Duale, Ovia & Alex-Adedipe (DOA). “Good governance allows for the opportunity to recognise budding problems before threats arise in a company. Directors and shareholders are more likely to make well informed decisions when the company structure and governance framework clearly define their roles and duties.”

Demonstrating good corporate governance practices also reassures potential investors, said Alabi and Idemudia. This flows through and puts industries and economies in a better place. 

“DOA has been very instrumental in terms of corporate governance for our clients in recent years,” said Alabi, a senior associate at DOA. “The notion of corporate governance has expanded and become widespread, particularly in light of investment opportunities that come from start-ups, along with big and large enterprises.”

DOA does a number of things to help their clients ensure good governance practices, including regularly issuing compliance trackers which detail what’s expected of companies, and undertaking company secretarial tasks on behalf of many clients. 

“We’re very broad; we look at the client’s whole business from the regulatory aspects to the day-to-day, board evaluations and training for board members,” Alabi explained. “Basically anything that will bring value to these companies. Because of this we’ve gotten a number of recommendations in recent times, so our company secretarial team is growing – and our client base.”

Idemudia noted that DOA has been getting many referrals from and to foreign businesses looking to operate in Nigeria. “We’ve been able to devise various means to ensure the systems by which companies operate are directed and controlled in line with Nigerian law. We proactively participate in training seminars and sessions which keep us in tune with recent trends in their industries, especially as it relates to corporate governance.” 

It’s important that a company’s board isn’t just a robot that automatically approves anything management brings up, noted Alabi. Regular board evaluations and training of directors is vital because better board performance leads to better company performance. “There has to be continuous development among independent non-executive directors on your board who aren’t part of the day-to-day operations of your company. That way they’re kept abreast of developments.”

Alabi and Idemudia believe that well-governed enterprises contribute a great deal to the growth of the wider economy, because they’re stable, sustainable, and capable of providing regular profits and earnings to employees while ensuring investor trust. The Organisation for Economic Co-operation and Development (OECD) includes principles of corporate governance among its key standards for a sound financial system.

“Good governance is founded on values of accountability, efficiency, justice and responsibility,” emphasised Idemudia. “And so, when a company basically has all of this in place, it places the company in a good place, which eventually puts the economy in a good place.”

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