TheCable

The Financial Reporting Council (FRC) says it has collaborated with the Convention on Business Integrity (CBi) and the United Nations Global Compact Network Nigeria (UNGC-NN) to launch a small and medium enterprise (SME) anti-corruption and corporate governance standards project.

The initiative is known as the ‘SME future-forward project’, and is funded by the MacArthur Foundation.

According to a statement issued by the organisers, the project is aimed at setting 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 percent of businesses in Nigeria. These enterprises are largely poorly governed, making it difficult to secure the capital needed for growth,” the statement reads.

“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, CBi, UNGC-NN and FRC said they would, through the 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.

The organisations also said 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 statement adds.