Kehinde Ogundimu, managing director and chief executive officer of the Nigeria Mortgage Refinance Company (NMRC) said that the failure of many corporates and some of the liquidated local banks in Nigeria is owing to poor corporate governance, driven by poor organizational culture.
According to him, building and sustaining good corporate culture is critical to the stability and survival of institutions and the Nigerian financial system.
Ogundimu said this during his keynote address at the 50th quarterly general meeting of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN) hosted by NMRC themed ‘‘The Role of Internal Audit in Building a Sustainable Organizational Culture.’
“A distinguishing feature of leading organizations is their culture. Culture affects performance, employee engagement and the ability to create an innovative and positive work environment,” he said in a statement.
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“Many chief executive officers believe that improving culture would improve the value of their companies because organizational culture impacts the appetite for change, innovation and risk awareness,” he further said.
Ogundimu stated that there is a strong relationship between organizational culture and corporate brand.
According to him, every organization including financial institutions values its brand and will go to every extent to protect it.
“The organizational culture must be right to sustain the reputation of the brand. He noted that “Poor organizational culture heightens reputational risk exposure to the organization and must be carefully managed.”
Highlighting the role of Internal Audit (IA) in building a sustainable organizational culture, Ogundimu said that as an independent, objective assurance and consulting activity of the internal audit is designed to add value and improve an organization’s operations by assisting in the establishment and sustenance of a good organizational culture through evaluating the design, implementation, and effectiveness of the organization’s cultural/ethics-related policies, procedures, programs and practices.
He said this is because internal auditors are comfortable in their understanding of culture before starting to audit the indicators; Include an element of culture into every risk-based audit using a testing program, survey, or both; ensuring bank-wide compliance with internal policies and procedures, relevant codes of corporate governance, other relevant laws, regulations and standards and recommendation of consequences for breaches, amongst others.
Also speaking in his welcome address, Yinka Tiamiyu, chairman of ACAEBIN, underscored the importance of the theme of the meeting stating that it encapsulates what the internal audit function does – to what extent processes, procedure, actions and the tone at the top are in line with the values, ethics, risk appetite and policies of the organization, noting that risk management, control, and governance are key elements in building a sustainable organizational culture.
He said that as an advocacy group, the Association is committed to collaborating with all relevant stakeholders in the banking industry in a bid to fashion out ways of improving collaboration, support, and information sharing, especially in the fight against banking fraud.
