Being keynote address delivered by the Chairman, Nigeria Exchange Group Plc, Alhaji (Dr) Umaru Kwairanga at the 40th anniversay luncheon, and Installation of the 41st President of Rotary Club of Ogba, Lagos on November 5, 2023 at Sheraton Hotels, Ikeja, Lagos.
Ladies and gentlemen, esteemed members of the Rotary Club, and distinguished guests,
It is a profound honour to stand before you today as I received the Rotary Distinguished Leadership Award for Service Excellence. I extend my deepest gratitude to the Rotary Club for this privilege and also express my sincere appreciation for your unwavering commitment to service and ethical leadership, which is a beacon of light in our world.
Today, I would like to delve into the significant relationship between a commitment to strong ethics and robust corporate performance This topic resonates deeply with the core values of Rotary and stands as a fundamental element in the success and sustainability of any organization, regardless of its size, industry, or location.
In a world often fixated on profits and competition, it can be easy to lose sight of the importance of ethical principles in the realm of business. However, I firmly believe that ethics should not be an afterthought or a mere compliance requirement but rather a cornerstone in the very culture of any corporation. Why is this the case? Because the connection between ethics and corporate performance is not incidental; it is symbiotic.
Ethical conduct nurtures trust, which is the lifeblood of business relationships. When a company consistently exhibits ethical behaviour, it establishes a reputation for trustworthiness. This trust, in turn, leads to loyal customers, contented employees, and enduring partnerships. It is no coincidence that the world’s most esteemed and successful companies are often recognized for their ethical business practices.
Unethical behaviour can lead to legal and regulatory complications, harm to reputation, and financial liabilities. By adhering to robust ethical standards, companies can mitigate these risks, ensuring their continued growth and stability. Ethical practices also foster customer loyalty When customers know that a company operates with integrity, they are more inclined to remain loyal. In an era where consumers have a plethora of choices, a commitment to ethics can be a distinguishing factor. The 2008 financial crisis and the subsequent backlash against unethical behaviour in the financial industry serve as a stark reminder of the consequences of ignoring ethical considerations.
Ethics also encourage a long-term perspective. Businesses that concentrate solely on short- term gains at the expense of ethical considerations frequently find themselves grappling with significant risks and setbacks in the future. In contrast, companies that prioritize ethical conduct
are more inclined to think about the long-term consequences of their decisions, resulting in enhanced stability and resilience. Consider the companies that have embraced sustainability and environmental responsibility, thereby promoting a brighter future for us all. Or ponder the organizations that have championed social justice and equality, sparking change far beyond their immediate impact.
Beyond profitability, businesses bear a profound responsibility to positively impact the communities they serve Companies that invest in ethical behaviour often engage in sustainability initiatives addressing crucial social and environmental issues.
Employees are drawn to organizations that align with their values. An organization committed to ethical practices naturally attracts individuals who are devoted, motivated, and passionate about their work. Engaged employees contribute to a positive and productive corporate culture, driving innovation and success.
In conclusion, the relationship between dedication to strong ethics and robust corporate performance is undeniable. The two are not at odds but rather mutually reinforcing. Ethical behaviour is a source of competitive advantage, driving trust, employee morale, and sustainability. It is a critical component of corporate success in the 21st century.
That is why the Nigerian Exchange Group which I chair puts ethics at the forefront for itself, its stakeholders and is listed companies.
Nigerian Exchange Group Plc, Africa’s leading financial market infrastructure group championing Nigeria’s sustainable economic development, plays a pivotal role in promoting ethical standards and governance practices within the capital market ecosystem. Through our subsidiaries, Nigerian Exchange Limited (NGX) and NGX Regulation Limited (NGX RegCo), we ensure that both market operators and listed companies adhere to the highest ethical and governance standards.
One such regulation is the Eligibility Criteria in The Exchange’s Rules for Listing on the Premium Board, which mandates that an issuer must undergo the Corporate Governance Rating System (CGRS) evaluation and attain a minimum rating of 70% before being admitted to the Premium Board of NGX. The CGRS evaluation is a rigorous process assessing a company’s corporate governance practices, transparency, and accountability. This requirement reflects our commitment to nurturing a class of listed companies that exemplify ethical and governance standards.
Moreover, NGX’s Rulebook outlines various obligations on market operators and issuers. These are actively monitored and enforced to ensure compliance. This proactive approach is a testament to our commitment to upholding the highest ethical and governance standards across the capital market.
Yet, it is not merely about rules and regulations. We understand that to foster a culture of ethics and governance, we must actively engage with market participants, offering guidance, support, and education. The Exchange’s X-Academy provides training programs, workshops, webinars. and resources to help listed companies, dealing members, and the broader investor.community enhance their understanding of ethical practices and good governance.
As we look to the future, let us all be champions of ethical leadership, fostering a corporate culture that prioritizes values and principles. In doing so, we can build companies that not only excel financially but also leave a lasting positive impact on our world.
I am deeply honored to participate in this discourse, and I extend my gratitude to the Rotary Club for recognizing the significance of ethics and governance in our business world. Together, we can champion the cause of ethical leadership and corporate performance, fostering a brighter and more prosperous future for us all.
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