Theme – “Succeeding at Business in an Institutionally-flawed Environment”
The Alvin Report convened a Roundtable on the theme “Succeeding at Business in an Institutionally-flawed Environment” moderated by Flora Fabyan, Managing Director of BOI Investment & Trust Company Limited. Dr. Austin Ebose, Managing Director of Anchor Insurance Limited, and Femi Oladehin, Managing Director of Argentil Capital Partners Limited, were invited as guest speakers. Other key industry figures attended the event.
Opening Remarks
The Roundtable began with opening remarks from Joseph Edgar, Publisher, The Alvin Report and Arch. Chike Iroegbunam, Managing Director, Orangeline Development and Chairman, The Alvin Report Think Tank. Joseph Edgar emphasized his reason for starting the Roundtable, citing the need for high-level discussions that mark the beginning of a process for steering meaningful change. Arch. Iroegbunam pointed out the need to act with urgency in confronting the nation’s many challenges.
Engendering Trust in a Low-Trust Environment
Discussions were started by Flora Fabyan. She started by asking both guest speakers how do they engender trust in their respective industries, given that ours is a low-trust environment. Both speakers in their different ways affirmed that there are individuals and organizations in their respective industries that have been able to build up admirable levels of reputational capital despite the trust deficit. Both however, acknowledged the magnitude of the problem and cited various strategies for overcoming trust deficits, including increased levels of due diligence, strict enforcement of contracts and timely reporting of adverse circumstances.
Corporate Governance
Flora Fabyan asked Femi Oladehin what is the one governance trait he looks out for in a company. He replied, the quality of the leadership. Flora Fabyan asked Dr. Austin Ebose whether he agreed. He did but with qualifications. He stressed the importance of entrepreneurial leadership, noting that in some organizations, leadership has the unfortunate tendency of becoming political.
Vertical Integration as a response to infrastructural constraints
Flora Fabyan noted that many companies are forced to provide their utility services, particularly power/energy, water, logistics, security, etc. making them “vertically integrated” operations. She asked Dr. Ebose whether such circumstances made underwriting such concerns riskier Dr. Ebose’s responded by discussing the need to carry out underwriting with strict rules to mitigate risk. Flora Fabyan would then ask Femi Oladehin whether the capital markets found the vertically integrated organizations more attractive as investments. He responded by saying that the situation was not ideal. That it has been brought about as a result of government failure. He pointed out that such circumstances increase the cost of business, and that they make the vertically integrated businesses more inefficient than they would otherwise have been. He also noted though the ecosystem rewards these vertically integrated concerns, we are however leaving a lot of value on the table as a result of the infrastructural constraints.
Opportunities in the informal sector
Flora Fabyan kicked off this round of discussions by noting that the informal sector comprised about 60% of Nigeria’s GDP. She asked Dr. Ebose what the insurance industry was doing to take advantage of the opportunities in that sector. Dr. Ebose started off by highlighting the challenges that make profiting from the massive informal sector difficult, like the poor enforcement of rules and regulations in Lagos state, the enforcement of which, would have encouraged the uptake of insurance products; the relative slower pace of process innovation in insurance when compared to the banking sector (he specifically cited the lack of the insurance industry equivalent of the BVN); the people’s propensity to self-insure and the unfortunate problem of unethical behavior. He ended, however by noting that uptake of insurance products by the informal sector was growing. When asked the same question, Femi Oladehin talked about the need to “think out of the box” when trying to communicate value to the people, citing the innovative work that the Bank of Industry was doing in convincing customers to apply for BOI loans despite the perception that the loans were difficult to get.
Bribery and Corruption
Flora Fabyan moved the discussions to the subject of corruption. At this point the discussion drew in other invited guests in addition to the guest speakers. The issue of culture and its relationship to corruption kept being re-echoed from multiple perspectives. It is clear more formal study will be required to understand the nuanced ways in which culture and corruption inform and shape one another.
Closing Remarks
Flora Fabyan brought the discussions to a close by noting the key takeaways; be ethical, do the right thing, corporate governance, and the importance of entrepreneurial leadership.
