The development and sustenance of viable enterprises is no longer dependent on the size of the corporation and related factors but sound ethical practices imbibed by all stakeholders, according to Vice President Yemi Osinbajo, SAN.
Prof. Osinbajo stated this on Tuesday at the virtual 2020 Conference of the Institute of Directors.
According to him, “The frequent clashes between conscience and wrongful behavior will eventually create a toxic work environment and destroy corporate objectives and visions. There is also enough history of how cutting corners and dishonesty ultimately bring down the whole enterprise. This we have seen in the facts behind the collapse of many Nigerian financial institutions from the nineties to the more recent occurrences in 2009. Yes, it took a while for the institutions to unravel but the point is made that on the long run, unethical practices are unsustainable.
“Besides for quoted companies, the dangers of unethical behavior are much graver. Local and international investors have greater access to information and more options than ever before, the slightest whiff of scandal or malfeasance can destroy value built up over the years.
The local and especially the international examples of the collapse of companies thought to be too big to fail and brand names that had even once been associated with integrity and strong business ethics is a strong reminder of just how brittle edifices built on weak business ethics are.
“Today, every company’s stakeholders are far more than investors, management, or employees. They now include customers, clients, trade partners, suppliers, media, the general public, government and now, the environment.”
The event featured presentations personalities including Prof. Marc Le Menestrel, a professor of Decision Sciences; Chairman of Governing Council, Institute of Directors, Chief Chris Okunowo; and Dele Alimi, DG/CEO, Institute of Directors.
Below is the full text of the Vice President’s remarks:
REMARKS BY HIS EXCELLENCY, PROF. YEMI OSINBAJO, SAN, GCON, VICE PRESIDENT, FEDERAL REPUBLIC OF NIGERIA AT THE 2020 CONFERENCE OF THE INSTITUTE OF DIRECTORS, ON TUESDAY NOVEMBER 3, 2020
I am honoured by your kind invitation to join you this morning at the 2020 Annual Directors’ Conference of the Institute. The Institute takes the credit for the development of Nigeria’s finest breed of business executives and directors in the fulfilment of their legal and personal responsibilities to the corporate entities they serve and of course, to Nigeria as a whole.
I am particularly excited about the recent efforts of the Institute to standardize the practice of sound ethical values and lead by example with the introduction in August this year, of the IoD Code of Ethics 2020 for members and staff of the Institute.
I, therefore, congratulate the President, Chief Chris Okunowo, who many of you know, is from the best schools in the World, Igbobi College, and the Faculty of Law University of Lagos, for steering the course of the institute towards global best practices. (I am offering no prizes for guessing that the two schools I mentioned are also the schools that I attended).
My brief remarks will centre around a question that has occupied my mind for many years and led to my co-founding the Convention on Business Integrity with my friend and brother Soji Apampa in 1997.
How do you most effectively convey the truth to corporate entities, to companies, that integrity pays, that business ethics is as crucial to the bottom line and to everything else, as the other more obvious factors in delivering profitability and recognition of success for a company?
The question is complicated by the notion that business ethics is itself an oxymoron, a contradiction in terms how can you survive in the cut-throat survival of the fittest environment of business with any kind of concern for morality?
Besides, in countries where regulatory oversight and law enforcement is weak and or slow, there would seem to be, at least, in the short term, no particular advantage in choosing ethical behavior over profit.
But the arguments in favour of business ethics are much stronger. Aside from the more obvious connection between respect for obligations, sanctity of contracts, and reliability or trustworthiness and business success, clearly unethical accounting practices, false communication to shareholders or the public, (where it is sanctioned by the leadership) results in employee cynicism and defeats the commitment to corporate visions and objectives. If the employees believes that the bosses are crooks or prepared to bend the rules, they also will seek ways of short-circuiting the rules for personal benefit.
Besides, the frequent clashes between conscience and wrongful behavior will eventually create a toxic work environment and destroy corporate objectives and visions. There is also enough history of how cutting corners and dishonesty ultimately bring down the whole enterprise. This we have seen in the facts behind the collapse of many Nigerian financial institutions from the nineties to the more recent occurrences in 2009. Yes, it took a while for the institutions to unravel but the point is made that on the long run, unethical practices are unsustainable.
Besides for quoted companies, the dangers of unethical behavior are much graver. Local and international investors have greater access to information and more options than ever before, the slightest whiff of scandal or malfeasance can destroy value built up over the years.
The local and especially the international examples of the collapse of companies thought to be too big to fail and brand names that had even once been associated with integrity and strong business ethics is a strong reminder of just how brittle edifices built on weak business ethics are.
Today, every company stakeholders are far more than investors, management, or employees. They now include customers, clients, trade partners, suppliers, media, the general public, government and now, the environment.
These additional relationships have become, especially in an age of clearly excessive information flows, as important in the accountability matrix of companies as their traditional stakeholders. This probably explains the new place of open corporate social responsibility efforts, and the strong environmental stewardship initiatives that many countries are adopting around the world. Companies must show that they are not only profitable but that they are good by measures of character and concern for the environment and society.
According to a study which I came across, by Nielsen, 55% of online shoppers in 60 countries would accept paying more for goods or services from companies that are focused on having a positive impact on society and the environment. And it is becoming more so. People are paying more attention to good corporate citizenship.
The empirical evidence is beginning to match our intuition more forcefully daily. However the key is leadership. Leadership that believes the evidence and realizes that business ethics are not just moral preachments but important foundations for profitable and sustainable businesses in the 21st Century.
Indeed, for Nigerian Business Leaders, the theme of this conference is a challenge to conquer in our own interest the new frontier in business ethics, ethical leadership and sustainability.
Let me thank the executives and members of the Institute of Directors for this opportunity. I wish you excellent deliberations and look forward to receiving your conclusions at the end of the conference.
