The Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN), has described innovation as a pathway to survival of Micro, Small and Medium-scale Enterprises (MSMEs) amid the COVID-19 pandemic.
They asserted that with the volatility associated with the pandemic, MSMEs could not be ignored in the business ecosystem. The Institute said they must be committed to ethical principles as a source of competitive advantage to them.
Speaking during a webinar programme on, “Survival of MSMEs During Uncertain Times: Is Corporate Governance a Luxury or Necessity?” at the 2020 Public Lecture, organised by ICSAN, Prof. Chris Ogbechie of the Lagos Business School (LBS), stressed the need to enhance MSMEs strength to jump-start the economy.
He noted that MSMEs may be hardest hit by recession, and less likely to quickly overcome the impact of the pandemic.
Ogbechie, the Chairman for the 2020 ICSAN Public Lecture, defined corporate governance as ethical and effective leadership by the governing body towards the achievement of ethical culture, good performance, effective control and legitimacy.
He noted that MSMEs face constraints across contexts to COVID-19 vis-à-vis limited access to finance amid fall in consumption levels.
He maintained that MSMEs being part of the ecosystem of most big businesses accounts for 50 per cent of the nation’s Gross Domestic Product (GDP), employs 77 per cent of the Nigerian workforce, 97 per cent of agriculture to GDP, while it contributes 55 per cent in the manufacturing sector.
The Guest Speaker and Co-founder of AACE Food Processing & Distribution, Mrs. Ndidi Nwuneli, revealed that most MSMEs do not have functional boards, as they are concerned about perceived cost in terms of time, resources of managing the boards and their potential value, finding committed and capable people as well as having trust issues.
She said: “Most SMEs do not know how to organise board meetings. They are not adequately prepared for board meetings, and they do not want interference with ensuring diversity in terms of experiences, gender ethnicity skills to truly maximize value.”
Earlier, President of ICSAN, Bode Ayeku, in his welcome address, noted that the federal government has also acknowledged the severe impact of the COVID-19 pandemic on the MSMEs, the reason it earmarked a stimulus package to the sector in its recently compiled sustainability plan.
He maintained that MSMEs, which has always been seen as a fiscal sector of the economy, have many who erroneously believe that the operators of the sector need not pre-occupy themselves with corporate governance principles on the grounds of their stay on operations.
He said the sector is critical to economic growth, but reels under formidable challenges, hindering growth and development in the sector.