Poor corporate governance worsens small business woes

According to him, the only guarantee for continuity in a firm is to put structures in place for the management of the business that will take care of the interests of all the stakeholders and enable the stakeholders to work together for the success of the company.

Speaking to the PUNCH, the acting Chief Executive Officer of the Institute of Directors’ Centre for Corporate Governance, Nerus Ekezie, said the impacts of corporate governance are monumental. “Organisations with good corporate governance systems are guaranteed to reduce the cost of capital, and the cost of loans, because investment or lending firms are confident in loan recovery. So, a major impact is that it lowers the cost of capital for the organisation,” he explained.

“If the Nigerian public sector embraces corporate governance, the needed foreign direct investment will flow into the country. If the institutions are doing well, it will enhance productivity and most importantly, social stability.“The Nigerian public sector needs to embrace corporate governance to attract foreign direct investment, enhance productivity, and improve social stability.

“For me, the less stringent these requirements are the better for small businesses. If you make them very stringent it is not going to be helpful. Small businesses cannot fully comply with these things. Let’s take registration with NAFDAC as an example. The cost of registering your product with NAFDAC is very high, and you have to do that for every package. If you have the same product in 50cl, 75cl and 100cl. Each of them will have to bear a number. So, the cost is heavy on small businesses.

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