LAGOS, NIGERIA, OCTOBER 26, 2022 – The United Nations Global Compact Network Nigeria and the Integrity Organisation/Convention on Business Integrity (CBi), in partnership with the Financial Reporting Council (FRC), are pleased to announce the launch of a Small Medium Enterprise (SME) Anti-Corruption and Corporate Governance Standards Project (SME Future-Forward Project”), funded by the MacArthur Foundation. This project aims to set standards for corporate governance, ethics, and sustainability to guide the direction, control, and management of SMEs in Nigeria, enhance their competitiveness, and achieve long-term success and value creation responsibly and sustainably.
It is estimated that SMEs constitute 96% of businesses in Nigeria. These enterprises are largely poorly governed, making it difficult to secure the capital needed for growth. Moreover, Nigeria’s challenging business environment creates pressures to adopt practices where complacency, shortcuts, corruption, nepotism, and discrimination flourish. These practices create a cyclical effect, compromising SMEs’ ability to achieve and sustain high-performance outcomes, hobbling their ability to source funds, and eroding their capacity to compete in the African Continental Free Trade Area (AfCFTA) and beyond.
The SME Governance Standards Project intends to change this narrative.
Using a data-driven approach, UN Global Compact Network Nigeria, CBi, and FRC will, through this Project, develop a replicable and scalable framework to enhance good corporate governance (anti-corruption, sustainability, and social equity inclusive) practices that would lead to a value creation strategy for all SMEs in Nigeria and increase their competitiveness, survival, growth, and succession. During the Project’s initial implementation, participating Future-Forward Companies will receive hands-on, personalised guidance and assistance to comply with the standards.
Given the pivotal role SMEs play in driving Nigeria’s economic development, poverty reduction, job creation, economic emancipation, and overall well-being, the Project seeks to prove that it is possible – and profitable – for small businesses to do the right things, the right way, in the Nigerian marketplace.
The Financial Reporting Council is a government agency whose mandate is to develop, publish, and regulate public interest entities’ accounting and financial reporting standards. Beyond their technical and regulatory function in accounting and auditing matters, the FRC works to ensure good corporate governance practices in the public and private sectors, protect investor and stakeholder interests, promote private sector growth, reduce market volatility, and improve national employment rates, and more. They are a key stakeholder in the push for a transparent, credible business environment in Nigeria.
The United Nations Global Compact Network Nigeria is one of the 74 local networks (country offices) of the United Nations Global Compact, the world’s largest corporate sustainability initiative.
Guided by The Ten Principles in the areas of human rights, labour, environment and anti-corruption; and the 17 SDGs, we support businesses and stakeholders in understanding what responsible business means within a global and local context and provide guidance to translate sustainability commitments into action. Our ambition is to mobilise a local movement of sustainable businesses and scale their collective impact. The UN Global Compact Network Nigeria stimulates and facilitates the creation of local connections and serves as a catalyst to Nigerian companies and stakeholders to achieve Agenda 2030, thereby improving the lives of future generations.
Founded in 1999, the Integrity Organisation/Convention on Business Integrity has worked to promote ethical business practices, transparency, and fair competition in the private and public sectors. Among other successes, they have established a Code of Business Integrity, developed a Corporate Governance Ratings System (used to assess companies prior to listing on the Nigerian Exchange Group), and used collective action to sanitize Nigeria’s business environment from corruption and fraudulent business practices. CBi wants to create and strengthen social-responsible businesses whose transactions are predictable, consistent, and ethical. They believe enhanced business reputations for individual companies will help bolster the development of Nigeria’s private sector.