The Financial Reporting Council (FRC) of Nigeria, in collaboration with The Convention on Business Integrity (CBi) and UN Global Compact Network Nigeria, officially launched the Small and Medium Enterprises (SME) Corporate Governance Guidelines on Thursday, May 30, 2024. This momentous event took place in Abuja during the Issuance and Unveiling Ceremony, where the guidelines were introduced to the esteemed guests, Small and Medium-Sized Enterprise (SME) community members, and the public.
Dr. Rabiu Olowo, the Executive Secretary/CEO of the Financial Reporting Council of Nigeria, delivered a thought-provoking keynote address during the ceremony. He expressed his gratitude for the opportunity to stand before the audience and highlighted the significance of this occasion in fostering a robust and resilient business environment. Dr. Olowo emphasized that the introduction of these comprehensive guidelines not only sets a new standard for corporate governance within the SME sector but also reinforces the Council’s commitment to excellence, transparency, and accountability.
During his address, Dr. Olowo emphasized the importance of SMEs in Nigeria’s economy. He highlighted that SMEs significantly contribute to the country’s GDP and are essential in driving innovation, fostering entrepreneurship, and promoting inclusive growth. However, for SMEs to unlock their full potential, robust corporate governance practices must be adopted.
Corporate governance, as explained by Dr. Olowo, is the system by which companies are directed and controlled. It encompasses the relationships between a company’s management, its board, shareholders, and other stakeholders. Good corporate governance provides the structure through which objectives are set, means of attaining those objectives are determined, and performance is monitored.
Dr. Olowo outlined the key benefits of strong corporate governance for SMEs, including improved access to capital, enhanced operational efficiency, long-term sustainability, and building stakeholder trust. He emphasized that transparent and accountable businesses are more likely to receive funding from investors and financial institutions. Clear governance structures also lead to better decision-making and more efficient operations, ensuring the long-term success of SMEs.
Recognizing that SMEs are the backbone of Nigeria’s economy, Dr. Olowo stressed the need to equip them with the tools and frameworks necessary to navigate the dynamic and volatile business landscape effectively. The SME Corporate Governance Guidelines, a simplified model of the Nigeria Code of Corporate Governance 2018, serves as the Financial Reporting Council’s response to the needs of the business community. These guidelines will support the SME sector and guarantee its sustained growth.
Dr. Olowo expressed his heartfelt gratitude to all those who contributed to the development of these guidelines, including The Convention on Business Integrity and the United Nations Global Compact – Network Nigeria. He also acknowledged the important roles played by regulatory bodies, such as the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the National Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), along with their state branches nationwide. Dr. Olowo extended his appreciation to industry associations and business leaders who provided invaluable insights and support throughout the process.
In conclusion, Dr. Olowo called on all stakeholders, including government agencies, financial institutions, business associations, and SME owners, to embrace the SME Corporate Governance Guidelines and commit to their implementation. He emphasized that good governance is a journey, requiring continuous effort, learning, and adaptation. Dr. Olowo believes that these guidelines will serve as a powerful catalyst for positive change within the business community, leading to a more transparent, accountable, and sustainable SME sector.
The launch of the Nigeria SME Corporate Governance Guidelines marks a pivotal moment for the nation. It presents an opportunity to set a new standard for how SMEs are run, ensuring they are well-equipped to compete on a global stage. By working together, stakeholders can create an enabling environment where SMEs thrive, driving economic growth and creating jobs for millions of Nigerians. Dr. Olowo expressed his anticipation of witnessing the remarkable achievements that will undoubtedly arise from this initiative.