Thursday, July 30, 2009

NSE: Engaging in enlightened self-interest

"Blessed are those whose lawless deeds are forgiven, and whose sins are covered; Blessed is the man to whom the Lord shall not impute sin." Romans 4:7-8

THE use of the term leadership gap here attempts to capture an aspect of leadership distinct from and above-and-beyond that which is attributable to personality. To place it within context, it is used as plural - identifying competencies that are likely to be in short supply relative to a development or the management of an issue. It is by no means reflective of an assessment of any individual personality but the collective.

At this time, the leadership issues that threaten to extend the declining market confidence in the Nigerian Stock Exchange beyond the significant and sustained crash in share prices goes way beyond a simple matter of filling positions; yet this aspect of the issue represents a hurdle we must overcome if we are to address the substantive issues thrown up.

At the very heart of the matter is the question of motive, culture and practice in an institution that represents a critical medium of wealth creation in our society. All men of honour and goodwill must therefore be concerned about the ill-wind that has made its way into the affairs of the institution, one we must arrest and address.

The pronouncements from commentators on all sides in the last few weeks have been disturbing just as they have been insensitive and factually questionable as to relevance to the needs of the market.

This situation has escalated over time with a series of misinformation and disinformation about the realities of the market, the value of the banks exposure to the capital market, the going concern of listed firms, the planned demutualization of the NSE, the election of a new president to the council of the NSE and on-going management changes and plans for the post Ndi Okereke-Onyuike era. Some of the commentaries have been very personal and damaging to reputations.

This conflict agenda, known only too well in political arenas, is not usually associated with a self-regulatory organisation that has, as part of its history, a list of distinguished Nigerian professionals. This legacy is now threatened. The summary of these developments is manifested in the increasing air of doubt over who assumes the mantle of leadership of the NSE Council. It is a needless exercise.

This is definitely not helpful to our economy and most certainly our markets. This cannot be a time to provide 'politics' a home in our market place when 'ideas' and 'selfless service' are needed. The front and centre issue for the post-crisis era must be the articulation and execution of the reforms needed to reposition the stock exchange as well as the reclaiming of the professional and moral authority of the leadership of the exchange. These are not impossible tasks given the quality, commitment and pedigree of those entrusted with the responsibility.

The key in all of this, is the appreciation and understanding of the public sentiment/mood on matters affecting the economy and our financial markets; and the alignment of actions, whether popular or otherwise, that are necessary to nudge the market towards a confidence zone.

This can only be achieved by the deft handling of sensitive issues through deeds and utterances that help to build rather than divide and not those that lean towards character assassination or a 'trial by the mob' approach. This market must repudiate the introduction of the 'political arena type' machinery to resolving its challenges. The realities of the economic downturn is setting in fast and creating an unsettling of money flow to the detriment of all concerned. No one would benefit from 'finger pointing' or 'blame allocations' - the agenda of fifth columnists who seek to divide rather than pull together.

The market is dealing with the banking sector challenges of expunging from its books verified toxic assets arising from exposures to margin loans, aviation and oil & gas sector financing that were especially prone to the global financial crisis. This must be placed in context against the backdrop of a Nigerian economy contracting monthly, a heightened and politically tense climate, civil unrests and insurgency from religious intolerance, election disaffection and the Niger Delta agitation which has assumed an expanded territorial scope of operations and impact.

All these have coalesced to extend the decline in the investors' capacity to spend as well as save/invest. Investment clubs, co-operatives and individual investors have and are losing members, infractions by brokers have risen compared to previous years, defaults have gone up and the business of share investing is under strain such that heating up the clime is an unwelcome response.

These are unusual times which call for an unusual sense of responsibility from the leadership. We are at a stage where 'self interest' must be set aside for the sake of the larger goal. The goal therefore must be to embrace these conflicts as a sign of the growing range of perspectives and viewpoints on what is needed in the market place at this time. We are sure that not all the views can be accommodated and in this lies a challenging task of ensuring that the arguments are not about 'victors' or the 'vanquished' but about being a 'market' able to deliver on its objective - wealth creation.

We intend on our part to explore how the understanding of these conflicts add up in helping the market reach the optimal solutions required to move it forward, as opposed to the current focus on personalities. After all, the leadership of the NSE comprises strong personalities and persons of high professional and social standing must be concerned about the message this conflict sends to the market about them.

Our hope is that by confronting the issues head-on, we may be able to place the developments in context, as imperfect as they may be, and create a basis to move on towards the work needed to achieve the market of our dreams.

The true accomplishment in this exercise must be the insight it provides the 'principal actors' to re-engage on issues. What is therefore the central issue here? That the Presidency must not move in accordance with the council's laid-down succession practice to Alh. Aliko Dangote because of his 'role' in the AP saga for which the SEC has adjudicated upon. This cannot be anything more than a fallacy.

There have been at least five processes that the matter has gone through and none has returned an indictment that might form a credible basis for such an action. Alh. Aliko Dangote may not be the most popular man on Broad Street at this time and not a few persons will have their reasons for this and are entitled to but the council cannot allow itself to operate on the basis of suspicion.

Frankly, I am not sure if I have read the 'tea leaves' properly here - determining to make a stand and even risk antagonizing people in authority and power. This must be the price for deviating from script and a politically correct approach which would have meant 'sitting on the fence'. It is also the case that by not 'looking the other way' and 'minding my business', we might risk alienation from the market we serve.

In every citizen's life, there comes a time, when the resolution of a dilemma in favour of one's conscience and conviction represents the most important sacrifice to nation and institution building. This must be one of such moments. We therefore embrace the challenge as all we have ever set out to do as a service provider is to reinforce the belief in the capital market as a veritable source of wealth creation guided by rules and the best of professionalism. Ours is a mission founded on the need to serve as a critical component of market confidence and a bridge on issues; and there cannot be a better time to live up to that ideal than now - as we descend into our summer of personality crisis. This is our reason for being in business. It is this business that I am minding.

At some point in the conflict, there will be an opening when settlement is possible, when angst turns to anticipation of a solution. The politically savvy know when this opportunity presents itself and the best of them always have one ear to the door of resolution, and when the time seems right, they open it.

One such opening presents itself on August 6, 2009 when the election of a new president to assume leadership of the NSE council will take place. The esteemed council owes the market that much.