The Institute of Directors (IoD) Nigeria, has emphasized the need to review and amend existing regulatory frameworks that are guiding corporate organisations to help address the impact of COVID-19 on the business environment.
While they sought for a collaborative approach to stem impact of the outbreak on businesses, they maintained that addressing systemic risks responsibly is a moral and economic imperative both for regulators and companies.
The institute called on government and relevant agencies such as the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC) and the Nigerian Stock Exchange (NSE), to put in place measures to consider and adopt virtual and/or hybrid regulatory windows to ensure companies fully comply with their legal obligations and duties without having to take matters into their own hands.
A position paper by the institute on COVID-19 pandemic, and signed by the Director-General and Chief Executive Officer, Dele Alimi, noted that the pandemic and the ensuing actions and pronouncements by government came with challenges and implications for corporate governance.
The institute stated that COVID-19 clearly meets the criteria of a systemic risk, which amongst others, builds over time, is interactive and synergistic and, once in play, is difficult to control.
According to the directors, “In Nigeria, while companies may want to move to a virtual or hybrid meeting in order to deal with the challenges presented by COVID-19, the lack of facilities and/or capacity, may force them to determine that the better course of action for them is to postpone or adjourn their annual meetings with attendant consequences.
“To provide succour for corporate Nigeria therefore, Government should consider putting in place a regulatory provision for companies to adopt either virtual-only or hybrid (with both in-person and virtual options) meeting structures to cater to unconventional and emergency situations in the business environment, going forward.
“Its drivers tend to be cumulative and/or interdependent, and could re-occur, resulting in far-reaching impacts, shocks or even system-wide failure. Hence the need to put in place some new regulatory mechanisms that can help address its impact on the business environment.
“IoD Nigeria notes the risks posed by the coronavirus to global economic growth, emerging markets economic growth, and the Nigerian economic growth. However, we believe that based on the on-going efforts made by the Federal and State Governments and all well-meaning stakeholders, the coronavirus could be contained much sooner.
“With increasing restrictions arising from the spread of COVID-19, a workable suggestion on how companies can navigate the challenge is pertinent. The situation may present a need for some regulatory framework that will accommodate and provide for unconventional issues of the modern day business environment, such as health emergency situations that have inherent commercial risks and impacts on businesses and corporate governance obligations.”
While calling for increased efforts by the government and all stakeholders to work together to stem the tide of the pandemic and impact on humans and businesses, they said the rise in the number of registered cases of the coronavirus infection and attendant restrictions by government in recent days is a worrying sign that all is far from being well.