we complete your success managing relationships governance for smes nigeria
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3 We Complete Your Success Methods of LearningTRANSCRIPT
We Complete Your Success We Complete Your Success
Managing RelationshipsGovernance for SMEs Nigeria
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Exit
Rules
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Methods of Learning
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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
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Stakeholders
COMPANY
Shareholders
Directors
Managers
Employees
Customers
LendersSuppliers
Regulatory Authorities
Local community
Union
…
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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
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Module content
1. Managing internal relationships
2. Managing external relationships
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Managing Internal Relationships
Session 1
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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
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Players within a company
Shareholders (Ownership)
Directors (Supervision)
Managers(Management)
Elect & dismiss Are accountable to
Report & answer toGuide & control
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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.
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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
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Directors
• Duty to act within powers
• Duty of skill and care
• Fiduciary duties
• Statutory duties
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Duty To Act Within Powers
• Act within their powers as defined by the constitution or approved by shareholders
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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.
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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
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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
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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
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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.
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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
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Managing External Relationships
Session 2
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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
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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.
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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
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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.
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Stakeholder Mapping
KEEP SATISFIED
KEEP INFORMED INVOLVED AND CONTRIBUTING
MINIMAL EFFORT
KEEP INFORMEDLOW
HIGH
LOW HIGH
LEVE
L O
F PO
WER
LEVEL OF INTEREST
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Influences
• Company’s Articles of Association• Laws and regulations• Policies and Procedures (internal and external)• Media• Standards• Political• Others
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Governance System
Stakeholders
Regulators Customers
Unions Suppliers Lawyers
Accountants Public
Rating agencies Media
Government
Influences
Articles of Association Policies and procedures
Laws and Regulations Codes of Best Practice
Standards Media
Economic conditions Government Policies
Shareholders Directors Managers
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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