Oando Hold's 31st Annual General Meeting EHSQ ... - Oando PLC

More documents

Recommendations

Info

Good Corporate Govenance and the Bottom Line In our last article, staff were enlightened on why Oando has imbibed compliance, the advantages of good governance, the myths often associated with compliance, etc. It cannot be over emphasized that corporate governance is the corner stone to a sustainable organization. It deals with the ways in which Shareholders assure themselves of getting returns on their investment. It is a system by which business corporations are directed and controlled. It specifies the distribution of rights and responsibilities among different employees in the corporation such as the board, managers, shareholders and other stakeholders and spells out the rules and procedure for making decision. In this article, we shall take a look at how good corporate governance affects the company’s profitability. The emphasis of corporate organizations around the world is gradually shifting from single bottom line approach (i.e. the organization is solely profit based. It’s only objective is to make profit) to the triple line approach. The triple bottom line is a business model that is concerned with a company’s social responsibility, environmental obligations and its financial or economic bottom line. In this article emphasis shall be on the economic and financial aspect of the model while the other two aspects i.e. social and environmental obligations will be dealt with in our subsequent publications. The finance people frequently ask – how will good corporate governance affect the company’s ability to sustain or surpass its profits? in other words, will compliance or noncompliance with laws, regulations and ethical practices affect the company’s figures at the end of the year. Non-compliance with government regulations e.g. tax returns, non-disclosure of directors’ interests, selling during a closed period, all attract fines and penalties and ultimately deplete profits, which in turn, deplete returns to shareholders. INVESTOR CONFIDENCE We should always remember that the end goal of corporate governance is to give shareholders confidence on how their company is run. Majority of investors view corporate governance as part of their risk assessment of the company. The appropriate management of company funds and assets and how financial statements are reported and verified are central to good governance. If investors doubt the honesty and transparency of a company’s financial reports, it can affect the company’s share value. It can also attract negative reputation and may cause the company to lose business opportunities. PROMOTER OF BUSINESS INTEREST Corporate governance in recent times has been acknowledged as a significant promoter of business interests. Corporate Governance & Business Ethics which had once been edged into the back seat by blatant commercial interest are now finding their way back into the board room. Ultimately, it is worthwhile for an organization to carry on business operations according to the rules even if their competitors do not. The value of the company lies not only in the superior physical, logistical and human assets but in the confidence that the business strategy is sound and system are in place to ensure that corporate assets are consistently deployed for the benefit of the company’s stakeholders. EMPLOYEE CONFIDENCE It is a proven fact that employee morale and confidence in an organization rises when they know that proper systems are in operation within the company. Employees tend to put in the extra effort and go the extra mile in an environment where ethical standards are high and lip service is not just paid to corporate governance but is actually practiced. This brings about high productivity and generates more income for the company. RISK EXPOSURE Corporate governance promotes corporate fairness, transparency and accountability, it however bring about less risk within the organization because there will be fewer defaults (if any at all), fewer financial crises. It will also help in reducing the incidence of fraud within the organization. INCREASED ACCESS TO FINANCING Investors are increasingly cautious when making decisions to invest. Financial institutions and institutional investors now carry out due diligence on prospective companies; they want to know how the company operates, its ethical stance, and compliance with regulations, as well as who their directors are, what their governance stance is. A company that practices good corporate governance invariably reduces its cost of capital when sourcing for finance from banks, and other financial institutions. PREVENTING CORPORATE FAILURES Corporate governance is about finding ways to ensure that decisions are made effective. In this regard the role of nonexecutive directors and significant shareholders is important. Better access to company information and regular communication with the company, in order for them to better understand the company performance, objectives and strategy is crucial. This will aid their contributions and enable them challenge the decision making process and thus prevent corporate failures. Toyin Araromi Compliance Manager OandoNews 10
Social Diary Coronation onation of Chief Felix N. Atako JP as Eze Okpebi Rebisi III in Port Harcourt HRM, Eze S. N. Woluchem JP, Eze Epera Rebisi (L) presenting Chief Felix N. Atako JP, Director, Oando, with the staff of office as Eze Okpebi Rebisi III Staff f Babies Chief Felix N. Atako JP, Director, Oando (M) with other title holders during his coronation Folasewa, Femi Adeyeye’s(Corporate Communications) daughter carrying her newly born baby brother Oluwanifemi Ethan Jekhine, Misan Jekhine’s (Shared Services) new baby boy was dedicated on 6th April, 2008 11 OandoNews
Page 1 and 2: Oandonews A Quarterly In-house Jour
Page 3 and 4: Oando hosts Students of Lagos State
Page 5 and 6: Gas & Power Oando Gas & Power Takes
Page 7 and 8: Pictures From the 31 st Oando AGM w
Page 9: OEPL Signs PSC, GMoU on OPL 236 Oan

Oando Hold's 31st Annual General Meeting EHSQ ... - Oando PLC

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?