• Tuesday, November 28, 2023
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Company directors urged to confront cultural influences

IoD urges business leaders to embrace innovative changes

Company directors have been urged to navigate the complexities of cultural influences and pave the way for truly effective governance practices.

This was highlighted at the Institute of Directors Nigeria Biennial Lecture and 40th Anniversary themed ‘Cultural Norms Versus Good Governance: Balancing the Tug of War’, which was held on Thursday, in Lagos.

The keynote speaker, Enase Okonedo, who is the vice chancellor of Pan-Atlantic University, elaborated on the influence of cultural norms on board dynamics.

According to her, corporate governance practices are contextual, varying across countries due to the influence of societal norms and beliefs.

“Culture as a learned trait, encompassing knowledge, beliefs, and views that often influenced attitudes in the boardroom,” Okonedo said.

Respect for hierarchy was one cultural attribute Okonedo identified as affecting board independence.

“Nigerian culture places significant emphasis on respect for authority figures and elders, potentially hindering open and critical discussions within the boardroom. Additionally, the aversion to challenging decisions hinders effective decision-making and weakens accountability on boards,” she said.

Corporate governance, as defined by IOD, was seen as the system by which a company is directed and controlled.

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Okonedo said that a company’s governance quality should not be solely based on factors such as board composition and the presence of independent directors.

Social and cultural laws are equally vital in promoting good corporate governance, according to her.

Religiosity was another factor highlighted by Okonedo. She said that the deep religious beliefs prevalent in Nigeria could lead to long-term orientations and patience, sometimes conflicting with the need for sharp performance focus. This balance between religious values and performance expectations posed a challenge for boards in decision-making processes.

Gender diversity on boards was also addressed during the lecture. Okonedo mentioned that traditional gender roles deeply ingrained in Nigerian culture could limit women’s participation on boards.

“Overcoming these cultural barriers requires intentional efforts by directors to create awareness and promote ethical practices within organisations,” she said.

Ije Jidenma, president and chairman of council, IoD Nigeria, opened the event emphasising the critical meeting point between societal and cultural norms and values and the principles of good governance.

Jidenma said that cultural norms represented the beliefs and practices shared by a society, forming the foundation of its standards and expectations. On the other hand, good governance refers to the management of social objectives, including the efficient use of resources, accountability, and responsible behavior, she said.

Jidenma stressed the need for synergy among all constituents of society to achieve a harmonious interplay between cultural norms and good governance.

She highlighted research by Aras and Crowther, which explored the influence of cultural norms on governance. Their work shed light on how national culture affected board dynamics and the functioning of corporate governance.