Customs Street Advisors

In February, Africa Investor, a premier provider of investment data, research, broadcast and published content to the investment community in sub-Saharan Africa invited me to participate in its survey on investor relations practices on the continent. The results which are published in the March edition of the magazine reveal a growing interest in the field and sharpened focus among practitioners on the issues they need to tackle for IR in Africa to assume the respected stature it enjoys among its peers in developed markets.

Catherine Wright of Africa Investor’s Johannesburg office co-ordinated the survey. Read More…

This week on Street Talking in NEXT, I deplore the atrocious treatment retail investors regularly receive from companies on the Nigerian Stock Exchange.

In his immensely entertaining account of the global economic meltdown, Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis – and Themselves, the author, Andrew Ross Sorkin, who is also the chief mergers and acquisitions reporter of the New York Times, describes a charged scene during a Lehman Bank board meeting held in July 2008. As the bank struggled to raise capital, Dick Fuld, its mercurial chief executive, invited Gary Parr, vice-chairman of Lazard Frères, the venerable investment bank, to provide his board with objective counsel on alternatives. Soon after the session began, Fuld felt that Parr was using it as an opportunity to ‘shamelessly plug’ Lazard’s experience with such Armageddon scenarios. Quickly, Fuld cut Parr off and thanked him for coming. Later that day, he telephoned the Lazard banker and threatened to fire him. The unflappable Parr replied, ‘that may be hard because you haven’t hired us yet.’ I enjoyed reading that story. Read More…

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 in Alrroya, the United Arab Emirates (UAE) business and financial daily, I urge public companies to reclaim their mandate in providing guidance to investors on their value generating potential from the tyranny of end-of-day stock price league tables.

I am not a huge fan of market closing price league tables. I studiously ignore titles like ‘Today’s 10 Bottom Stocks,’ ‘5 Leading Losers,’ ‘10 Market Chargers,’ ‘10 Exchange Laggards’ on the Markets pages and financial websites. These companies are not in any competition with each other in that sense. I am not aware of any chief executive that purposely determines that his company stock should rise the most or fall the least on any given day. 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…

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 on Street Talking on NEXT, I review the tactics of shareholder agitants on the Nigerian Stock Exchange in 2009 and identify why they enjoy very limited success in galvanizing popular support.

In his famous 1947 essay, ‘The Sources of Soviet Power’, George Kennan, the late distinguished foreign policy wonk, writing under the pseudonym ‘X’, advised the US government that only ‘the adroit and vigilant application of counterforce at a series of constantly shifting geographical and political points’ could contain Russia’s imperial ambitions. His ideas would lead the US to sponsor several proxy wars in countries far removed from the epicenter of its vital interests such as Angola, Laos and Vietnam. 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.

Read More…