• Wednesday, July 17, 2024
businessday logo

BusinessDay

Why many businesses in Nigeria fail – MD NMRC

NMRC beats expectations, grows profit to N3.64bn amid headwinds

Kehinde Ogundimu, managing director/chief executive officer of the Nigeria Mortgage Refinance Company (NMRC) has attributed the failure of some businesses, including liquidated local banks in Nigeria to the absence of effective corporate governance driven by poor organisational 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 spoke 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 organisational culture.’

“A distinguishing feature of leading organisations is their culture. Culture affects performance, employee engagement and the ability to create an innovative and positive work environment.

“Many chief executive officers believe that improving culture would improve the value of their companies because organisational culture impacts the appetite for change, innovation and risk awareness,” Ogundimu said in a statement.

According to him, there is a strong relationship between organisational culture and corporate brand.

Read Also: NMRC earns recognition as Best Mortgage Institution

He noted that every organisation, including financial institutions values its brand and will go to any extent to protect it.

“The organisational culture must be right to sustain the reputation of the brand. He noted that “poor organisational culture heightens reputational risk exposure to the organisation and must be carefully managed.”

Highlighting the role of internal audit in building a sustainable organisational culture, Ogundimu said the objective assurance and consulting activity of the internal audit is designed to add value and improve an organisation’s operations by assisting in the establishment and sustenance of a good organisational culture through evaluating the design, implementation, and effectiveness of the organisation’s cultural/ethics-related policies, procedures, programs and practices.

This, he noted, is because internal auditors are comfortable in their understanding of culture before starting to audit.

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 organisation, noting that risk management, control, and governance are key elements in building a sustainable organisational culture.

He said 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.