Nigerian Banks and the Challenge of Corporate Communications
The banking industry in Nigeria has in the past year or thereabout faced complex reputation problems. And it seems like the cracks are getting worse as the corporate affairs executives in the industry try to fix them. Now some are asking whether the problem could be that corporate affairs executives are not are not empowered enough to deliver the goods. Joseph Ekeng writes.
The ACAMB press release that followed the controversial report by The Africa Report that only four Nigeria banks are strong had every trapping of desperation. The group had quickly moved in to label the report as unreliable, making reference to some other foreign organizations that gave the banks a pass mark.
ACAMB stated that African Business Research Limited, a research-oriented consultancy, specializing on Africa financials, and Forbes had declared that the banking industry was stable, vibrant and capable of meeting its financial obligations to all stakeholders.
“Various Fitch Ratings, an equally reputable international agency, as well as the respected International Banker Magazine, have equally accredited the Nigerian Banks healthy and showing strong presence in the global ratings of banks,” ACAMB asserted.
But if the corporate affairs executives expected that their defense will sway the public, they were probably wrong. Some depositors have simply shrugged off the opinion with a wave of the hand. “What did you expect them to say, did you expect them to say that the magazine was right,” Femi Ogriki, a Lagos based businessman, said, insisting that the corporate affairs men of most Nigerian banks don’t sound convincing.
Ogriki’s dismissive attitude towards ACAMB’s defense is typical among most depositors and other stakeholders, who have come to regard the corporate affairs staff as a group of polished guys, struggling to find their bearing in a highly mobile and volatile industry.
Mallam Kabir Dagogo, a retired corporate affairs top shot at Union Bank noted in his book, Beyond The Banking Hall, that “before now, the function of the corporate affairs executives had tended to be reduced to the errand boys of the CEOs.”
Dagogo, who served in the banking industry for 15 years, however, also defended that both functions are entwined because in building and managing the corporate reputation or the public relations function of a bank, the image maker, by implication, bolsters the reputation of the bank’s CEO.
Many communication analysts believe that the banking industry has not empowered its communicators adequately. Why, for instance, is it impossible for a reputation manager to become an ED of a bank? asked one of them.
In a tacit admission of this sentiment, the banks recently agreed to set up an investor relations unit. According to an analyst, the investor relations unit staff, though they are public relations persons in their own right, are trained to disseminate financial information.
“They have, not only the skills in terms of financial information, they also have understanding of feedback assessment and they are trained to communicate at all times, and not hold back,” Femi Awoyemi CEO of Proshare, a stock market analyst firm, said.
The above definition of the role of the investor relations unit staff when placed side by side that of the corporate affairs staff may structurally look similar but it differs in technical terms. While the IRU officials are equipped for the tougher and more demanding job of financial information which addresses the core functions of the banks, their counterparts in corporate communications will handle the less technical and banal banking details.
However, over the last four years, since the consolidation, the banks have made some effort to improve the quality of their corporate communication staff. “The level of skills available in the banks has improved considerably and generally. Many Nigerians have been hired from reputable organizations in the UK, South Africa, United States and so on,” Jide Akintunde Managing Editor Financial Nigeria magazine said.
Yet he admitted that the industry still has a long way to go, not only in the aspect of corporate communications, but also in other fields. “There is still some skill shortage in the industry, especially in the specialist areas of corporate banking and project finance. Continuous training can help improve the skill level, and training is now more correctly seen as investment, instead of an expense,” Akintunde said.
This obvious gap in the ability of the banks to understand and appreciate the delicate role of the corporate affairs unit has left a lacuna that encourages rumour and panic in the market and an obvious lack of aspiration among the corporate communication staff. Though some corporate communications heads have risen to the AGM management cadre in some banks, even the most intelligent and ambitious of them almost might never get past that level.
In the midst of the current economic meltdown, the financial market has become more volatile and unpredictable. Never before has the need for banks to better mange its reputation and stabilize public confidence been more imperative. Experts have argued that the post consolidation challenge and the implication of the global meltdown put a lot of demand on the office of the corporate communication executives of banks.
Some banks seem to have realized this challenge and are already working at it.” I do know of a bank that is organizing a major journalism training institute, like a series, not just one off,” Awoyemi said, noted that such a move will create a bridge that helps to take away the challenge in terms of banks’ ability to communicate and be properly represented.
Awoyemi also added that in this post consolidation era, stakeholders in the industry will need to retool in order to engage in the new language that this post consolidation crisis requires. “Companies must therefore communicate constructively, and they will need the media as partners in their communication process.
“The role of the media becomes critical, because you can either create crisis that can crash the whole market or you can say, yes, we have problems but these are the actions being taken to solve it,” he said.
Awoyemi’s proposal will be adequately tested in the next four or five months when the common year policy deadline expires, and banks are made to disclose fully their financial details. Experts have predicted that there could be some areas of challenge that need to be professionally and responsibly communicated to avoid panic or pressure on the market. But that will depend on who is communicating it, and how prepared he is to do that.
