Onyema attributes corporate failures to weak governance
The Chief Executive Officer of the Nigerian Stock Exchange (NSE), Oscar Onyema has identified weak corporate governance as the major reason for many corporate failures in Africa.
Speaking at the 19th yearly ASEA conference in Johannesburg recently, Onyema stressed the need for securities exchanges to create strong platform through which the exchanges can influence and promote sustainable business practices.
He added that the securities exchanges must increase their contribution and participation in developing national codes of corporate governance, by setting strong listing and maintenance requirements, and ensuring adequate disclosure of listed companies’ corporate governance arrangements.
“ Weak corporate governance is often found responsible for many of the corporate failures in Africa. However, as securities exchanges, we operate powerful platforms through which we can influence and promote sustainable business practices.
“Accordingly, we must increase our contribution and participation in developing our national codes of corporate governance, by setting strong listing and maintenance requirements, and ensuring adequate disclosure of listed companies’ corporate governance arrangements. Africa is becoming known as the continent that leapfrogs traditional stages of growth or development.
“We have seen this in the telecommunications industry where despite insurmountable challenges with communications infrastructure, the impact of mobile phone technology in Africa has been phenomenal, and is now revolutionizing many other sectors of our economy.”
According to him, Africa’s positive outlook is one of the many opportunities that if well harnessed could position the continent for greater heights.
“Our markets currently cover multiple asset classes from equities and bonds to ETFs and derivatives. In 2015 year to date, African exchanges collectively have traded over $325.0 billion in equities, $1.2 trillion in bonds, and $438.0 billion in ETFs & Others, representing a market capitalization of over $1.3 trillion.
“In terms of governance and ownership structure, several of our exchanges are demutualized, while others are in the process of demutualizing. Today, our exchanges are becoming active players in the global exchange business, and the conference theme is about sustaining that growth position, and becoming a real platform for growth in the African economy.”