Customs Street Advisors

Recently, Nestlé Switzerland, the global nutrition, health and wellness giant, invited me to share my thoughts on the age-old shareholder-stakeholder debate on the company’s corporate social responsibility blog, Creating Shared Value.  The article, which was published today, espouses my thoughts on the growing irrelevance of the traditional arguments that have pitted campaigners, advocacy groups and activists against corporations. I conclude  that there has never been a better time to move from tense face-offs to constructive engagement.

Normative extremism in the shareholder versus stakeholder debate may well be on its way out. If shareholder value was the pre-eminent metric of corporate entity success in the past two decades, in the new decade it will be far less so. The undisputed twenty-plus-year reign of financialization could be drawing to an overdue end. Similarly, the exclusive rights on do-gooder patents that activist groups, environmental campaigners, social crusaders and community advocates have hitherto laid claim to might be nearer its expiry date than its partisans realize. After waging an acrimonious war for so long, veterans on both sides have almost failed to notice how close they are to a final settlement. My prognosis is that the fanatical bi-polarism of hardliners on either side of the debate will give way to one that vigorously searches for common ground. Read More…

This week on Street Talking in NEXT, I take a step back from my parochial interests in investor relations and shareholder issues to trace the tight relationship between sound judgment among the political leaders and national economic progress. My inspiration has been the realization that even with the most enthusiastic and sincere efforts by companies, the responsibility for creating an enabling business environment lies with the government. If the government fails in that task, or the politicians deny that duty, then no matter the commitment of companies and the capital that investors are willing to pump in, the economy will not reach its full potential, ultimately hurting shareholders in the long run.

Today, my story begins with the unlikely case of Brazil. By the way, my interests have not shifted to football. Nonetheless, it is still a bit of deviation from my usual neck of the woods. First, a little bit of background to provide some colour. Read More…

This week in Alrroya, the United Arab Emirates (UAE) business and financial daily, I champion the beneficial role that media interviews can play in raising the profile of companies among the investment community and addressing malignant information asymmetry.

Most public company executives regard media interviews as a distraction. In their view, they would rather be running their companies. As far as they are concerned, there is a dichotomy between minding the store and talking about the store. Read More…

This week on Street Talking in NEXT, I discuss the importance of design in encouraging shareholders to actually want to study annual reports, which is indispensable if they are to understand the business environment, strategy and operations of companies enough to hold boards accountable.

Collecting annual reports is my pet passion. For Christmas, my partner gave me the 2009 edition of the Graphis Annual Report, a coffee-table worthy tome of report design, which I had long fantasized over. At my local post office, I have gained some notoriety for receiving cartons of annual reports from all around the world. I enjoy studying the layout, language, typography, colours, photography, illustrations and paper. At home, I have a room stacked to the ceiling with reports. Just looking at them in that rainbow array is as visually satisfying to me as any aficionado’s art collection. Read More…

In announcements on strategic actions, companies often present the singular act as sufficient cause for a boost in shareholder value. This week in Street Talking on NEXT, I argue that that is not enough. To enjoy a higher valuation, companies need to improve the information environment to give investors a clearer view on the business. Simply focusing on other companies that have enjoyed higher trading multiples consequent to such transactions misses the subsequent actions they took in ensuring that the markets had a better understanding of their value creating actions.

This week marks the second anniversary since Apple, the maker of iconic products, announced its entry into the mobile handset space with the iPhone. On the same day Steve Jobs, its CEO, demoed the phone at the January 2007 MacWorld Conference, the company changed its name from Apple Computer to simply Apple, Inc. The Cupertino, California-based company’s decision to excise ‘computer’ from its name was intended to reflect its transition from solely designing and making personal computing products with cult status to a broader portfolio of consumer electronics goods and services, including on-line distribution of music, home entertainment systems, digital audio players, cellphones, software and of course, computers with wider appeal outside its core geek demographic. Read More…

This week in Street Talking on NEXT, I argue that the corporate social responsibility initiatives by companies on the Nigerian Stock Exchange ought to aim further than philanthropic gestures to a broader set of objectives of significance to socially responsible fund managers.

The story I am about to recount is not intended as a joke. Just the other day, I stopped at my roadside vulcanizer’s to peak my tire pressure. Fill done, I brought out my wallet to pay. As I made to pay, Musbau, the head vulcanizer, smiled at me and announced with all the benevolence he could muster, ‘Oga, no worry. Today, na free as part of my own corporate social responsibility.’ Corporate social what? Obviously, my shock at his familiarity with the term failed to register. ‘Yes, I don decide make I dash my customers free air today as part of Christmas appreciation,’ he beamed. Read More…

This week in Street Talking on NEXT, I discuss the critical role company websites can play  in closing the mispricing gap between stock prices and the underlying value of companies on the Nigerian Stock Exchange.

I am appalled at the failure of most companies on the Nigerian Stock Exchange (NSE) to utilize the web for investor engagement. In fact, about half of the companies on the NSE do not have any web presence at all. Among those that do, only a small number leverage the channel for investor communications despite the fact that a growing number of investors make decisions to buy, hold or sell stocks based on information they find on the Internet. If it is axiomatic that information is the lifeblood of markets, then company websites ought to be the most credible and authoritative sources for relevant, reliable and timely information. Read More…

This week in Street Talking on NEXT, I share my views on the probable preoccupations of shareholders and boards in the coming year.

As the year draws to an end, it is tempting to make prognostications for the coming year. If I had to identify the main trends contending for top spots on the investment community agenda in the coming year, I would forecast a rise in shareholder interest in corporate governance and heightened monitoring of capital structure evolution as it impacts the stakes of antecedent shareholders. My outlook is that passive shareholder acquiescence will be replaced by active participation in strategic decision-making, particularly among holders of non-negligible blocs of stock.

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Under Cecilia Ibru, its former CEO, Oceanic Bank enjoyed a public reputation for ethics in business. However, recent revelations since her removal on August 14, 2009 by the Central Bank of Nigeria have thrown rotten eggs at that edifice.This week on Street Talking on NEXT, I argue that the real challenge before Oceanic Bank today is not merely to retain client custom, but to win back the admiration and respect it once enjoyed as the bank committed to ‘building a stronger Nigeria’.

Commitment. Goodwill. Gratitude. Loyalty. Prudence. Resilience. Stewardship. According to its current ad campaign, these foundational values, all built around institutional dependability, form the seven-fold chord that binds Oceanic Bank to its customers. The theme song of the campaign, ‘Today is a good day’, is an infectious anthem to optimism. Sensually, the campaign aces on visual and aural scores. In fact, the bank and its agency may well go on to win a clutch of awards for the campaign. Alas! This should not be a marketing campaign but an identity crusade.

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Five years is more than enough time for companies to answer the ‘to be or not to be’ question on the attractiveness of a strategic proposition and then conclude it. Five years after merger talks began between First Bank of Nigeria and Ecobank, both banks are yet to bring the deal to a cloture. This week on NEXT, I point out that the main obstacle to progress may lie in a fundamental disagreement on strategy for a future resulting entity.

Mergers and acquisitions (M&A) are not trivial events. Synergy evaluation, regulatory hurdles, valuation disputes, internal and external claimsholders’ buy-in, advisory fees, integration factors, cultural issues, competitor objections, unsolicited offers and ego management are just some of the mid-air sharp knives that task the juggling skills of those driving a transaction. Little wonder that veteran investment bankers love to decorate their offices with commemorative Lucite tombstones (‘deal toys’) of consummated deals as testimonies of battlefield scars. Nurturing a deal from the first date until the dotted lines are signed demands superior matchmaking skills. Read More…