Corporate Governance – MTNN’s Experience
MTN Nigeria By:
Ahmad Farroukh
Presented By: Uto Ukpanah
May 2010
Aim of Presentation
AIM
To provide information
and share knowledge
on Corporate
Governance with
particular reference to
MTN’s experience
Corporate Governance
‘I am becoming less and less comfortable with the phrase “corporate
governance” – not because of its content but because it has been so
widely
used that it may become meaningless. There is a danger that it will be
recited as a mantra, without regard to it’s real import. If that happens,
the
tendency will be for those who have to pay regard to it to develop a tick
box mentality. The attitude might be ‘ ‘Yes, we have a state – of the art
corporate governance model; yes it is committed to writing; and yes,
the
Company Secretary has checked that each item is in place and has
included
a statement to that effect in the annual report. Therefore there could be
no
problem in the corporation’.
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Corporate Governance
- Definitions
• The practices, principles and values that guide a
company and its business every day, at all levels
of the organisation;
• Corporate governance comprises the long-term
management and oversight of the company in
accordance with the principles of responsibility
and transparency.
Corporate Governance
Why?
•Improves access to capital
•Leads to a better system of internal control, thus
leading to greater accountability and better profit
margins
•Paves the way for possible future growth,
diversification, or a sale, including the ability to attract
equity investors – nationally and from abroad – as
well as reduce the cost of loans/credit for the
company
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Corporate Governance
Why ?
• Provides the proper incentives for the Board and
Management to pursue objectives that are in the
interest of the company, shareholders and other
stakeholders, as well as facilitate effective
monitoring.
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MTN – Corporate Milestones
•
•
•
•
•
•
•
Incorporated 8th November 2000
Digital Mobile Licence (DML) 9th February 2001
Commenced operations 8th August 2001
Universal Access Licence 1st September 2006
3G Licence 1st May 2007
Submarine Cable Licence 1st January 2010
Part of the MTN Group
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MTN: Core Values
• Leadership
• Integrity
• Innovation
• Relationships
• ‘Can do’
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MTN: Governance Structure
•
•
•
•
•
Shareholders
The Board
Management
Employees
Other Stakeholders
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MTN: Corporate Governance
Framework
• Institutional and policy framework for
ethical practice
• At MTN we have clearly defined and
communicated code of ethics
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MTN: Corporate Governance
Policies
MTN Corporate Business Principles
• Whistle Blowing Policy
• Document Retention Policy
• Guidelines in the Conduct of Governmental
Affairs
• Code of Ethics
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MTN: Corporate Governance
Affiliations
• Convention on Business Integrity
• United Nations Global Compact
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MTN: United Nations Global
Compact (UNGC)
• We have participated in the following UNGC initiatives:
– Communication on Progress (COP) : an online
publication for company participants which
showcases good practices in line with the Global
Compact’s ten principles.
– RESIST Project: Participated in UNGC project named
‘Resisting Extortion & Solicitation in International
Sales and Transaction’ (RESIST). MTNN suggested
practical ways of dealing with real-life situations of
corruption and bribery.
– UNGC Publication: Provided key content for UNGC
publication titled The Business Case Against
Corruption.
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Corporate Citizenship
• Adding value
• Corporate Social Responsibility
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MTN: Adding Value
• GSM has brought empowerment, and has unleashed
previously underrated potential in Nigerians:
• Millions of Nigerians are today connected to each other
and the rest of the world
• Millions of businesses have been created and enhanced
since the introduction of GSM
• Thousands of jobs have been created directly and
indirectly
• Nigerian professionals have all skilled up to
accommodate the new standards required
• Sponsorship of sports, music and various laudable
causes have reached new heights
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MTN: Adding Value
• Championing of best Practise QoS KPIs reporting
• Ensuring the prompt payment of interconnect
receivables, AOL, Spectrum fees, Numbering fees etc
etc
• Promotion of self regulation in collocation &
infrastructure sharing
• Championing reduction of multiple taxation and
regulation
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MTN: Adding Value
• Active input in industry initiatives, proposed
regulations and guidelines e.g. SIM Registration,
Corporate Social Responsibility, SMS interconnect
rate, interconnect rate review
• Spearheading Industry public campaign on perceived
EMF health concerns from mobile telephony
installations
• Championing Best Practise Regulatory Environment
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Adding Value
GOVERNMENT TAX & OTHER LEVIES AS AT SEPTEMBER 2009
Duties on Equipment
Duties on stock
Aug. 01 – Sept 09
46,317,957,298.26
5,693,175,035.90
VAT on Revenue
VAT on Operating Expenses
WHT
Employee Taxes
NCC Levy
CAC
Stamp Duties
Building Permit
Local Govt Permit
Motor Vehicle/Hackney Permit
Licence
Admin Charges on Licence Fee
Rates & Taxes
88,911,774,761.22
12,050,586,220.37
40,065,175,691.84
9,387,399,982.25
42,705,760,330.78
152,798,600.00
541,704,090.00
141,179,731.82
870,390,278.01
248,130,571.00
53,038,136,986.30
4,480,000.00
854,428,385.44
Company Income Tax
Education Tax
NIDT Fees
78,403,507,729.18
18,378,408,268.31
2,857,965,215.13
TOTAL
400,622,959,175.82
Adding Value
• GSM has brought empowerment, and has unleashed
previously underrated potential in Nigerians:
• Millions of Nigerians are today connected to each other
and the rest of the world
• Millions of businesses have been created and enhanced
since the introduction of GSM
• Thousands of jobs have been created directly and
indirectly
• Nigerian professionals have all skilled up to
accommodate the new standards required
• Sponsorship of sports, music and various laudable
causes have reached new heights
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Adding Value: MTN Payments as Govt.
Taxes & Other levies - 2001 to May 2008
Nature of Federal charge / levy
(NGN)
LICENCE FEES DML,UASL,0806 Numbering Fess
51,603,930,000.00
NCC - annual operating levy, miscellaneous fees & dues
30,216,953,616.42
Duties on Stock
4,426,573,597.75
Duties on Equipment
38,064,303,135.85
VAT on Revenue
59,647,561,507.74
VAT on Operating Expenses
8,860,302,554.30
Withholding Tax
26,225,239,589.79
Employee Taxes
6,828,495,139.48
Corporate Affairs Commission
152,798,600.00
Stamp Duties
541,704,090.00
LOCAL GOVT PERMITS
326,399,819.15
MOTOR VEHICLE AND HACKNEY PERMITS
162,497,730.68
RATES AND TAXES
750,956,430.74
BUILDING PERMITS
141,179,731.82
COMPANY INCOME TAX
2,305,896,140.90
EDUCATION TAX
3,055,389,716.00
NITDEF
1,104,538,191.13
TOTAL
234,414,719,591.75
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Corporate Social Responsibility
MTN Nigeria Foundation
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MTN: Corporate Social
Responsibility
‘Companies in developing nations face some of
the most difficult investment climates in the world.
For them CSR is not a luxury good. It is common
sense’
- Peter Woicke, IFC Vice President
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Corporate Social Investment
THE MTN FOUNDATION
• CS I – Key to MTN’s business strategy;
• Align CSI with MTN’s brand essence.
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CSR – Why?
•
CSR is an all round responsible way of doing business
•
CSR goes beyond the statutory obligation to comply
with legislation
•
In the last decade, directional signals point to increased
corporate investment and an apparent transition from
giving as an obligation but to giving as a strategy
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CSR – Why?
Hence, MTN adopted a corporate culture to do good
because:
•
•
Not only is it important to give back to communities in
which we operate, it is also smart business
Healthy communities are important to the wellbeing
of society and the overall economy
At MTN, CSR is an integral part of our business
strategy, thus the MTN Foundation was established as
the vehicle for MTN’s aggressive CSI agenda.
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About the MTN FOUNDATION
In 2003, The Board of MTN Nigeria approved the establishment of a Foundation
to manage the organisation's Corporate Social Responsibility initiatives. The
MTN Foundation was formally incorporated in July 2004.
Mission
“To improve the quality of life in communities all
over Nigeria”
Key Focus Areas and Objectives
Health
Bridging the digital
Education
divide
Alleviating the health challenges of
Nigeria
Economic
Empowerment
Restoring human dignity
through self sustenance
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MTNF - Achievements
Over 160 projects in 33 states from 2004 till
date
Invested N4 billion till date
Built the capacity of local partner
organisations /NGOs
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MTNF – Education Portfolio
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MTNF Project C.L.E.A.N - Alesinloye Market,
Ibadan
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MTNF – Economic Empowerment
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CSR - Challenges
•
Sustainability of project initiatives
•
Overwhelming request from communities
•
Multiple areas of need in Nigeria and govt’s
inadequacy to meet basic needs, thus putting
pressure on corporate organisations
•
Managing stakeholders’ expectations
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A case for good corporate
governance
“If a country does not have a reputation for strong
corporate governance practices, capital will flow
elsewhere. If investors are not confident with the level of
disclosure, capital will flow elsewhere. If a country opts
for lax accounting and reporting standards, capital will
flow elsewhere. All enterprises in that country suffer the
consequences.”
Arthur Levitt,
former Chairman of the
US Securities & Exchange Commission
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Future Outlook
•Continue to build on our corporate governance
structures
• Constructive engagement with shareholders and
other stakeholders
• High quality of financial and non-financial
disclosure
• Continue to invest in our communities
• Lead by example
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MTN – Corporate Governance
Thank you for your attention.
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