In Nigeria, a nation rich in resources and potential, the persistent spectre of national protests and conflicts looms large. These disruptions, often sparked by socio-economic grievances, have profound implications for national stability and economic growth. Amidst the turmoil, the role of corporate governance in mitigating conflict and fostering resolution is increasingly significant. It is within this context that we explore how robust corporate governance can contribute to national harmony and prosperity.
Nigeria has a long history of protests and conflicts, with roots deeply embedded in political, economic, and social disparities. From the Niger Delta militancy, driven by demands for resource control and environmental justice, to the more recent #EndSARS protests against police brutality, these movements have often resulted in severe disruptions. For instance, the #EndSARS protests of October 2020 led to widespread unrest, with the Lagos Chamber of Commerce and Industry estimating economic losses of approximately ₦700 billion (about $1.8 billion) in just 12 days. Such events underscore the devastating impact of unresolved grievances on national stability and economic health.
Corporate governance, the system by which companies are directed and controlled, has a pivotal role in addressing these issues. Effective corporate governance fosters transparency, accountability, and ethical behaviour within organisations. By extension, these principles can influence broader societal interactions, potentially mitigating conflicts before they escalate. In Nigeria, several corporate governance initiatives have played a role in conflict resolution, albeit with varying degrees of success. A notable example is the Niger Delta Development Commission (NDDC), established to address the socio-economic challenges in the oil-rich Niger Delta region. While the NDDC has faced criticisms for corruption and inefficiency, its establishment was a step towards addressing the root causes of unrest by channelling resources into development projects. Corporate entities operating in the region, such as Shell and Chevron, have also adopted corporate social responsibility (CSR) initiatives aimed at improving community relations.
These initiatives, which include building infrastructure, providing scholarships, and supporting local businesses, have had some success in reducing tensions. However, for corporate governance to be truly effective in conflict resolution, there needs to be a concerted effort to ensure accountability and transparency. The recent allegations of financial mismanagement within the NDDC highlight the need for stronger oversight mechanisms. Companies must also ensure that their CSR initiatives are not mere token gestures but are genuinely aimed at addressing the needs and concerns of local communities. This can be achieved through active engagement with community leaders and stakeholders, ensuring that development projects are relevant and beneficial.
Cost of living crises, marked by skyrocketing prices of essential goods and services, have become a significant trigger for protests in Nigeria. Corporate governance can play a crucial role in addressing these crises. For example, during times of inflationary pressure, companies can adopt responsible pricing strategies to avoid exploitative practices. Engaging in open communication with consumers about price changes and their reasons can also help build trust and reduce tensions. Additionally, companies can invest in community support programs that alleviate the burden of high living costs. For instance, food and utility subsidies for low-income families can make a substantial difference.
In the broader context, corporate governance can help mitigate the impact of cost-of-living crises by promoting fair wages and ethical labour practices. Companies can ensure that their employees are paid living wages that keep pace with inflation, thereby improving their purchasing power and quality of life. This not only helps in retaining a motivated workforce but also contributes to social stability by reducing economic disparities. Moreover, companies can support local economies by sourcing materials and services from local suppliers, thereby creating jobs and boosting economic activity within communities.
Beyond Nigeria, there are numerous examples of how corporate governance has been leveraged to resolve conflicts and foster peace. In South Africa, the aftermath of apartheid saw significant efforts to integrate corporate governance into the nation’s reconciliation process. The King Reports on Corporate Governance, starting with King I in 1994, emphasised the importance of ethical leadership, sustainability, and social responsibility. These principles have helped South African companies navigate the complex socio-political landscape, contributing to national stability. Another example is Colombia, where corporate governance has played a role in the nation’s peacebuilding efforts following decades of civil conflict. Companies in Colombia have adopted governance practices that promote transparency, ethical behaviour, and social responsibility. By committing to these principles, businesses have contributed to creating a more stable and predictable environment, which is crucial for long-term peace and development.
In the context of Nigeria, corporate governance can be further enhanced by adopting international best practices and learning from these global examples. The Corporate Governance Rating System (CGRS) introduced by the Nigerian Stock Exchange is a step in the right direction. It evaluates companies based on their adherence to corporate governance standards, promoting transparency and accountability. However, there is room for improvement, particularly in ensuring that these standards are not just met on paper but are implemented in practice. For corporate governance to effectively contribute to conflict resolution in Nigeria, it must go beyond compliance. Companies should adopt a proactive approach, engaging with communities and stakeholders to understand their needs and concerns. This involves regular communication, transparency in operations, and a genuine commitment to social responsibility. Companies should also collaborate with government and civil society organisations to create a holistic approach to conflict resolution. One practical step is for companies to establish conflict resolution mechanisms within their governance structures. This could include setting up grievance redressal systems where community members can voice their concerns and have them addressed promptly and fairly. Such mechanisms can help prevent small issues from escalating into major conflicts.
Additionally, corporate governance can play a role in fostering economic opportunities that address the root causes of unrest. For instance, companies can invest in local supply chains, creating jobs and supporting local businesses. This not only boosts the local economy but also builds goodwill and trust within the community. The Nigerian Breweries’ “Youth Empowerment” program is an example of such an initiative, providing vocational training and business support to young people in the communities where the company operates. Moreover, adopting environmental, social, and governance (ESG) criteria can guide companies in making decisions that are not only profitable but also socially responsible. By integrating ESG principles into their operations, companies can contribute to sustainable development and reduce the risk of conflicts arising from environmental degradation or social inequalities. For instance, Dangote Cement has implemented various ESG initiatives aimed at reducing its environmental footprint and supporting local communities, demonstrating a commitment to sustainable and responsible business practices.
In conclusion, the role of corporate governance in national protest and conflict resolution is both significant and multifaceted. By promoting transparency, accountability, and ethical behaviour, corporate governance can help address the root causes of unrest and foster a more stable and harmonious society. Nigeria can learn from global examples, adopting best practices and integrating them into the local context. For corporate governance to be truly effective, it must go beyond compliance and be driven by a genuine commitment to social responsibility and community engagement. The key takeaway from this discussion is that corporate governance when implemented effectively, can be a powerful tool for conflict resolution and national development. It requires a holistic approach that involves not just companies but also government and civil society organisations. By working together and adopting a proactive stance, stakeholders can create an environment where businesses thrive, communities prosper, and national harmony is achieved. This is the path to a more stable, prosperous, and peaceful Nigeria
Research & Advocacy Department,
Chartered Institute of Directors Nigeria,
28, Cameron Road, Ikoyi Lag