Group Managing Director of Dangote Industries Limited, Mr. Olakunle Alake, has identified absence of sound corporate governance structures and proper succession planning as reasons indigenous companies hardly outlive their founders.
Delivering a paper titled “Corporate Governance and Succession Planning” at the 35th Omolayole Management Lecture series in Lagos, Alake said many great indigenous businesses collapsed partly because effective corporate governance structures and succession processes were not put in place to ensure that these businesses were sustained.
He said: “For businesses with poor corporate governance structures, the founder was often the chairman and the chief executive, who made all decisions. They believe in owning all without a thought for tomorrow. He alone had the vision, energy, strategy and ran the business. When the man died, the business died.”
However, he pointed out that with a good board, sound corporate governance structures and proper succession planning, the founder can retire without looking back and the company will continue to thrive because there would be transferred vision and goals. “There would be effective corporate governance and shared operational sustainability. These are fundamental reasons why a business must have a proper and effective board.”
Alake recalled that in the period of the early 70s and late 90s, several Nigerians held sway at the top of many blue chips and they adopted sound corporate governance practices and implemented credible succession plans, which was why many of them are still existing till date.