How to mitigate impact of COVID-19, by IoD boss

By Ibrahim Apekhade Yusuf

For Mr. Bamidele Abayomi Alimi, Director-General and Chief Executive Officer at the Institute of Directors (IoD) Nigeria, while government policy responses will be required to address, as a matter of urgency, the risks to individuals and public health, the COVID-19 crisis is also having a real impact on economic activities and financial markets.

According to him, particularly, the unfolding and profound uncertainties create great challenges for corporate organisations, their boards and their investors as they contemplate how best to navigate these difficult and dynamic times.

“Generally, companies listed on global stock exchanges are required by law to hold Annual General Meetings (AGM) to present their statement of financial affairs to shareholders. In Nigeria, the Company and Allied Matters Act (CAMA) requires all Nigerian public limited companies (PLCs) to hold AGMs within 15 months of their last AGM.”

The IoD boss also lauded the CBN credit relief of $136.6million to businesses affected by the coronavirus pandemic as well as the recent advice by the Nigerian Stock Exchange for all listed companies to put in place adequate precautionary measures to ensure the safety of all stakeholders during their Annual General Meetings (AGM), while also urging companies to adopt the safety procedures provided by the NCDC in preparation for their AGMs.

Waxing philosophical, Alimi said, “COVID-19 would have been for most companies and boards a proverbial “unknown unknown,” adding that many companies would have had in place disaster or crisis planning capabilities and/or business continuity plans, to deal with these sorts of unknowns or unanticipated shocks.

With increasing restrictions arising from the spread of COVID-19, workable suggestions on how companies can navigate the challenge is pertinent, he said.

The situation, he stressed, may present a need for some regulatory framework that will accommodate and provide for unconventional issues of the modern day business environment, such as health emergency situations that have inherent commercial risks and impacts on businesses and corporate governance obligations.

Expatiating, he said, there is, therefore, a great need for the government and relevant agencies such as Security & Exchange Commission (SEC), Corporate Affairs Commission (CAC) and the Nigerian Stock Exchange (NSE) to consider reviewing and amending existing regulatory frameworks that are guiding corporate organisations to accommodate and provide for emerging issues arising from COVID-19 and related matters.

“Globally, Stock Exchanges have taken a number of steps in response to the outbreak. Some of them are extending the reporting period for annual results from March 30, 2020 to April 30, 2020, waiving initial an annual listing fees for issuers registered in Hubei province; and encouraging companies to hold their meetings electronically.

“In Nigeria, while companies may want to move to a virtual or hybrid meeting in order to deal with the challenges presented by COVID-19, the lack of facilities and/or capacity, may force them to determine that the better course of action for them is to postpone or adjourn their annual meetings with attendant consequences.”

To provide succour for corporate Nigeria, the IoD helmsman said, “Government should consider putting in place a regulatory provision for companies to adopt either virtual-only or hybrid (with both in-person and virtual options) meeting structures to cater to unconventional and emergency situations in the business environment, going forward.”

IoD Nigeria, he further stressed, notes the risks posed by the coronavirus to global economic growth, emerging markets economic growth, and the Nigerian economic growth.

“However, we believe that based on the ongoing efforts made by the federal and state governments and all well-meaning stakeholders, the coronavirus could be contained much sooner. We also note that addressing systemic risks responsibly is a moral and economic imperative both for regulators and companies. It is therefore on this note that we wish to call on the government to put in place measures to consider and adopt virtual and or hybrid regulatory windows in order to ensure that companies fully comply with their legal obligations and duties at such a time as this presented COVID-19 without having to take matters into their own hands.”