" />
Published On: Sun, May 20th, 2018

Foreign CEOs take over Corporate Nigeria

. They are trying to protect their interests – Experts

 By AYOOLA OLAOLUWA

Foreigners have taken over the management of most multinational companies in Nigeria, BusinessHallmark findings have revealed. A two-week survey conducted by BH in May 2018, which involved fifty top companies, show that twenty-eight of the companies are headed by expatriates, while only twenty-two were headed by Nigerians.

Though the percentage of Nigerian CEOs in management positions looked impressive on paper, checks revealed that they are concentrated only in the financial sector, majorly owned and controlled by indigenous Nigerians. Apart from the banks and audit firms where Nigerians reign supreme, they are outnumbered in several other sectors such as telecoms, IT, construction, pharmaceutical, fast-moving consumer goods (FMCG), among many others.

This development is in total contrast to the one witnessed in the 70s, 80s, and 90s, where multinationals embarked on a deliberate policy to identify outstanding Nigerians who were groomed as successors to the expatriates who were running the companies at the period.

Outstanding managers such as Segun Osunkeye of Nestle, Festus Odimegwu of Nigerian Breweries, Ernest Shonekan of UACN, Christopher Kolade of Cadbury, Felix Ohiwerei of Nigerian Breweries, Bunmi Oni of Cadbury, Dayo Lawuyi of Dunlop, Rufus Giwa of Lever Brothers, and a host of others were produced by the policy.

Unfortunately, the trend has changed, as expatriates are now deliberately sourced to head multinationals while Nigerians are sidelined, BH findings revealed.

According to checks, the three major companies in the construction sector, Julius Berger, SETRACO, and Reynolds Construction Company (RCC) are headed by expatriates.

The same scenario is almost replicated in the oil and gas industry where three out of the five major players are headed by non-Nigerians. While Shell Nigeria and Oando, a fully-owned Nigerian firm, are headed by Nigerians, oil majors, Chevron, Mobil, Total are managed by foreigners.

The situation is worse in the fast-moving consumer goods (FMCG) sector where out of the fourteen top companies doing business in the country, only two, UACN and Dangote Cement are headed by Nigerians. The others, namely British American Tobacco Company (BAT), Nestle Nigeria, Nigeria Breweries Plc, Paterzon Zochonis (PZ), Cadbury, Larfage, Guinness, 7-Up Bottling Company, Nigerian Bottling Company, Coca Cola, Unilever, DUFIL Prima Foods and Flour Mills of Nigeria are managed by expatriate CEOs.

The telecommunications sector is more balanced in the sharing of CEOs positions. While Globacom and MTN Nigeria are managed by expatriates, the other two GSM providers, Airtel and 9Mobile are headed by Nigerian.

Nigeria fare much better in the banking sector with an almost total domination of the management of the sector. All the banks examined, except Ecobank are headed and run by Nigerians. The top banks are Union Bank, First Bank, GTbank, UBA, Zenith Bank and Access.

The two major firms in the IT sector providing financial solutions to banks and other agencies, Interswitch and Mastercard are controlled by Nigerians.

Other sectors such as maritime and pharmaceutical are not left out in the lopsided sharing of CEOs positions. All the four major firms in the maritime sector, Nigerdock, Maersk, APM, and Intels, are managed by non-Nigerians, while in the pharmaceutical sector, GlaxoSmithKline Nigeria and Swiss Pharma Nigeria Limited are manned by expatriates while May & Baker Nigeria Plc headed by a Nigerian.

The dominance of foreign chief executives officers (CEOs) at the helm of affairs of companies operating in Nigeria, according to some experts who spoke with BH, is quite worrisome

The CEO of Anabel Group, Mr. Nicholas Okoye, while speaking on the development, stressed the need for organisations to implement effective succession planning strategy that would help prepare Nigerian managers to handle key positions in multinational firms’ operating in the country.

He blamed the development on the dearth of capacity building, and absence of succession planning that exists in the corporate Nigerian firms’ and organisations, insisting that their predecessors have not supported the local professionals to get the right leadership training.

He advised Nigerian firms to adopt a local content strategy that would involve putting the right capacity to ensure that Nigerian managers are properly trained in the areas of handling the responsibilities of managing a multinational firm.

“Most of these firms’ have the last Nigerian chief executive officer 10 to 20 year ago. There was a time that all these multinationals were managed by Nigerians but now, they are not so.

“There are capacity gaps which are obvious, so companies and industries need to work together to proffer a solution to this problem by helping to bring up the capacity of Nigerian managers and leaders to a point where they can be given the responsibilities of managing those large conglomerates.

“If a company decides that it is within their interest and strategy to ensure that they have the local capacity, then that plan for succession starts today, even if it will happen five years from now.

“You start training the people you have selected, give them the right skills, right exposure, right training processes and procedure to make sure they have the capacity to manage; so when it is time for them to take over, they can do it effectively.

“But if that process has not started yet, the risk of having foreigners dominate every conglomerate in Nigeria will continue to dovetail. The longer we come up with some kind of solution or intervention plan to arrest the situation, the better for us.

“We need to find a solution to get Nigerians back to manage key responsibilities, it requires local content strategy. The local content strategy is not only giving people contracts, it also involves putting the right capacity in areas of offices of leadership, and if we are losing the ones we had in the past, then there is a problem,” he said.

Another Nigerian who runs a recruitment agency, Paul Ilo, said the parent-head offices of the companies are to blame for the development.

“It is frustrating that in spite of having the required skills most Nigerians cannot aspire to the highest office in their place of employment due to considerations outside competence. The most worrying part of this development is that Nigerians are not even given a chance to compete for these positions in most cases.

“What usually happens is that the global head office or the regional office just sends the names of the preferred candidates without even allowing qualified Nigerians a chance to compete for the positions.”

A bitter Nigerian, who did not want his identity disclosed, while narrating how he was denied the opportunity to head the company he works for, blamed some former indigenes for the backlash.

“Most foreign firms did not deliberately opt for foreign nationals or set out to spite Nigerians but as a means of safeguarding their investments. Our immediate past CEO was a Nigerian who mismanaged the place. Since the fraud that followed his departure came into the open, the foreign owners decided not to trust any local to handle top and sensitive positions, but most people from abroad to do so.

“If you look at it, I think the rationale is simple. Though they make it look as if Nigerians are unfit for those positions, I do not think that is really the case. I think it is a matter of putting one of their own in charge of their investment.”

He added that most multinationals now prefer to have their people on the board in executive capacity unlike in the past when they were mostly non-executive members.

“But they got their fingers badly burnt. Many of them now prefer having their people in executive positions either as the overall boss or someone quite close to that position,” he said.

According to an article titled: ‘Multinational Corporations and their Effects on Nigerian Economy’ published in 2016 in the European Journal of Business and Management, there are three models of employment by multinational companies: polycentric, ethnocentric and geocentric. The authors concluded that many of the multinational companies in Nigeria are operating the ethnocentric model.

According to the three Nigerian lectures who authored the article, J. Eluka, Ndubuisi-Okolo Purity and Anekwe Rita Ifeoma, most multinational in Nigeria prefer the ethnocentric model which is based on the assumption that management and human resource practices are critical core competence to the multinational’s competitive advantage and as such should be properly handled.

“With this model, foreign subsidiaries are not given real autonomy as major decisions are made by the headquarters. In addition, the bulk of the management staff is usually sent from the headquarters and comprises mainly the parent company nationals.

But a lecturer at the Osun State University, Dr. BiodunAlaka, blamed the preference of multinationals for expatriates to the decline in the productivity of Nigerian executives.

Alaka, who is an associate professor of business administration, lamented Nigerians’ lack of capacity to function effectively in management positions.

“The situation is very bad indeed. To show you how bad it is, most companies in Nigeria, including indigenous companies are recalling retirees to work in the industry because many of our youths are not ready.

“Excellence has no tribe or colour. Those who have repeatedly shown that they can deliver on expected terms will always have an edge over others. Why do Nigerian construction companies prefer artisans from other West African countries? Are there not artisans in Nigeria?

“The reason is simple; these people from the neighbouring countries deliver value while Nigerian artisans hardly do. Whoever engages a workman expects value delivery, if he is not sure he will get the value, he will go elsewhere. That is the reality of our times and the earlier Nigerians get to understand that, the better for us.”

“We must get to the position where we have to do a radical paradigm shift to get our young people interested in this industry. We must be moving towards knowledge-driven economy, and use global thinking and competitiveness for indigenous growth. Knowledge is a global thing. We must prepare our youths so that they can play along.

A human capital development consultant, Dr. Bimbo Okunade, said that no company would look beyond its shores for recruitment if it could get the desired competence from within the country.

“What Nigerians need to realize is that the world has become flat. In fact so flat that companies want to have the same standard in every part of the world. With globalization, there is no room for mediocrity.

“If Nigerians want first-class jobs they have to offer first class services. In the world that we are in now, there is no room for sentiments; every company goes for the personnel that can deliver to it what it wants no matter where such individuals may be located. The system in operation globally does not give room for mediocrity but meritocracy.

“Let’s cast our minds back to the time of Dr. Christopher Kolade, Chief Ernest Shonekan, and  Chief Felix Ohiwerei, would anyone think of any expatriate replacing them? It was practically inconceivable because those men were world class, they could hold their heads high anywhere in the world.

“So, rather than lament and complain over being sidelined, what should be done is that Nigerians in the corporate world should increase their competence and capacity so that they would be the preference of multinational companies for top notch positions,” Okunade noted.

 

© 2018, Hallmarknews. All rights reserved. Reference and link to this site is required if you wish to reuse any article.

Reactions from Facebook

comments and opinions

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>