Stakeholders seek risk management, corporate governance systems’ review

•Charge professionals on ethics to sustain businesses post-COVID
Stakeholders in the banking and risk management sectors have called on organisations to review their risk management frameworks and corporate governance systems, to adapt to the new normal.

According to the experts, every sub-sector of the economy is facing a new normal, and there is a need for businesses to ensure that their systems of governance were in line with best practices.

Specifically, Chairman of Board, Planet Governance Advisory, and Managing Director/CEO, John Holt Plc, Dr. Nosike Agokei, said with the advent of COVID-19, systems of running businesses were fast-changing. He urged organisations to redesign their corporate governance frameworks for sustainability.

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Speaking at the induction ceremony of members of Risk Managers Association of Nigeria (RIMAN), into the Chartered Institute of Bankers of Nigeria (CIBN) at the weekend, he said it was not enough to have a corporate governance system that did not recognise risk management as part of its framework.

According to him, there was a need to ensure that all aspects of governance within organisations were managed properly, to avert a major issue when a particular risk crystallises, noting that it was time to review risk management systems, as some organisations were still using pre-COVID-19 frameworks.

Agokei said: “We would get to a point where the new normal would not be new anymore, but business as usual. If the system of governance is not good enough, there is no way we would achieve the objective of making a profit and delivering returns to business owners.

“This is why we now need to redesign our corporate governance systems for us to be able to run businesses and organisations in the current situation that we have found ourselves.

“If you run a business efficiently in line with good corporate governance structure and you do not have a good risk management system, it may mean that the business that has been well run would disappear in less than 24 hours if a major risk surfaces.”

However, he noted that bad corporate governance could lead to loss of investments, reputation capital, and most times, loss of jobs and could also lead to serving jail terms.

He charged professionals to adopt best practices and look at internal control systems, which were part of the corporate governance system, and speak out if they are not working or being applied the right way to sustain businesses, especially post-COVID-19.

He maintained that there should be a balance between generating revenue and mitigating risks, saying that although organisations were set up to achieve certain objectives, they can’t achieve them without good corporate governance, which involves risk management.

“We need to make revenue, but we also need to apply safety. The only way to manage or mitigate risks is to adopt and apply corporate governance practices very well. If we do this, then we’ll be on a part to progress,” he added.

In his remarks, President and Chairman of Council, CIBN, Bayo Olugbemi, said the induction was apt, as it points towards solving the challenges posed by the new normal.

“The theme of the event, ‘New Normal: Emerging Issues With Corporate Governance,’ was timely due to the unprecedented disruption in the world, which was brought by COVID-19 and the immediate disruption in our daily movement and businesses by the #EndSARS protest. You would agree with me that the subject is really very apt because of the inherent risks,” he said.

Also, President, RIMAN, Magnus Nnoka, in his remarks, said there was a new normal in the way risk management was being practiced, noting that corporate bodies need to remodel their corporate governance structures to align with the new normal.