1 We Complete Your Success Managing Relationships Governance for SMEs Nigeria

2 2 We Complete Your Success Exit Rules

3 3 We Complete Your Success Methods of Learning

4 4 We Complete Your Success Why relationship management? A company is not an 'island‘ - it has many inter- dependencies It is made up of people often with differing views, opinions, beliefs and values It has an impact upon or is impacted by many groups of individuals (or organisations) - called "stakeholders".  All of these relationships, whether internal and external need to be managed

5 5 We Complete Your Success Stakeholders COM PANY Sharehol ders Directors Manager s Employe es Custome rs LendersSuppliers Regulatory Authorities Local community Union…

6 6 We Complete Your Success Module Objectives Identify key players within a company and examine the tensions, dilemmas and challenges between them Identify external stakeholder groups and examine the tensions, dilemmas and challenges between these groups and the company Examine the impact of outside influences on decision- makers Develop appropriate governances responses

7 7 We Complete Your Success Module content 1.Managing internal relationships 2.Managing external relationships

8 We Complete Your Success Managing Internal Relationships Session 1

9 9 We Complete Your Success Objectives and content - Session 1 Objectives: –Identify the key players, their rights, duties and liabilities –Explain the tensions between the key players and how to solve them Content: –Key players –Tensions

10 10 We Complete Your Success Players within a company Shareholders (Ownership) Directors (Supervision) Managers (Management) Managers (Management) Elect & dismiss Are accountable to Report & answer toGuide & control

11 11 We Complete Your Success Management Management have their roles, responsibilities, duties and rights set out in the following documents: Their contracts of employment the country's employment law the power delegated to them by the Board or in the case of a Managing Director the Shareholders.

12 12 We Complete Your Success Shareholders Obtain relevant material information about the company on a timely and regular basis Vote on appointment and removal of Board members Share in the company’s profit Participate in, and be sufficiently informed on, fundamental decisions such as: –Amendments to articles of association –Conducting major transactions such as acquisitions, disposals, changes in business plan that are outside normal business activities –Financing obligations Pre-emption rights

13 13 We Complete Your Success Directors Duty to act within powers Duty of skill and care Fiduciary duties Statutory duties

14 14 We Complete Your Success Duty To Act Within Powers Act within their powers as defined by the constitution or approved by shareholders

15 15 We Complete Your Success Duty Of Care –Exercise reasonable care, skill and diligence. –This means the care, skill and diligence that would be exercised by a reasonably diligent person with (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions of a Member of the Board of the organisation, and (b) the general knowledge, skill and experience that the Member has.

16 16 We Complete Your Success Fiduciary Duties To act in the best interests of the organisation To exercise their powers for a proper purpose No ‘fetter on discretion’ No conflict of interest No secret profit To act in accordance with the company’s constitution To deal fairly as between different shareholders

17 17 We Complete Your Success Statutory Duties Do any Statutory Duties Exist for Directors in the Following Areas? Companies Act Employment Law Data protection and privacy laws Health and safety laws Customer rights Human rights Environmental Others

18 18 We Complete Your Success Director’s Rights Access to information Reimbursement for pre-approved expenses incurred Discharge their duties without interference from co-directors Attend and participate in board meetings Notice of meetings Advice Delegation

19 19 We Complete Your Success Tension between players Shareholders & Directors/ Managers: –Differing views on the future strategy for the company –Dividend available to be paid vs Reserves kept for reinvestment –Dividend available to be paid vs Directors/managers remuneration Directors & Managers: –Directors’ duty to promote the success of the company vs Managers’ obligation to their functional activity and staff.

20 20 We Complete Your Success Dealing with Internal Tensions Introduce Good governance practices Develop an effective Control Environment Act as a Good Corporate Citizenship Build Trust through disclosure and transparency Robust and transparent relationships with stakeholders Strong commitment to good governance

21 We Complete Your Success Managing External Relationships Session 2

22 22 We Complete Your Success Objectives and content-session 2 Objectives: –Identify the key stakeholders –Explain the benefit of engaging stakeholders –Map out the position of each stakeholder and decide how to engage it –Deal with influences Content: -Stakeholders -Influences

23 23 We Complete Your Success Key external stakeholders Parties with contractual relationships Employees Contractors and suppliers Providers of capital Business partners, regulators, accountants, auditors, etc. Other parties not having contractual relationship Communities NGOs Analysts, investor associations, pressure groups Media and other “reputational” agents, etc.

24 24 We Complete Your Success Why engaging stakeholders? Build & strengthen a good reputation and brand recognition –Gain and retain loyal customers –Attract talented staff Reduce risks Tapping opportunities for innovation Create value and wealth

25 25 We Complete Your Success How to engage stakeholders Start early Keep an open mind Tailor engagement practices to the needs and interests of the company and its stakeholders Manage engagement as a business function Take a long-term view.

26 26 We Complete Your Success Stakeholder Mapping KEEP SATISFIED KEEP INFORMED INVOLVED AND CONTRIBUTING MINIMAL EFFORT KEEP INFORMED LOW HIGH LOW HIGH LEVEL OF POWER LEVEL OF INTEREST

27 27 We Complete Your Success Influences Company’s Articles of Association Laws and regulations Policies and Procedures (internal and external) Media Standards Political Others

28 28 We Complete Your Success Governance System

29 29 We Complete Your Success Contact SME Management Solutions (Business Edge & SME Toolkit) IFC Sustainable Business Advisory/Nigeria First Floor, Maersk House Plot 121 Louis Solomon Close, Victoria Island Lagos-Nigeria Tel: +234 1 2799 400 Fax: +234 1 2793618-9