Demutualisation will reduce conflict of interests

The Group Chief Executive Officer, Nigeria Exchange Group Plc, Mr Oscar Onyema, has said demutualisation will reduce conflict of interests in the shareholder-owned entity and support agile decision-making.

Onyema said this at the Association of Capital Market Academics of Nigeria (ACMAN) webinar on Friday where he was featured as the guest speaker.

He added that demutualisation would improve governance, bring about greater management performance, transparency and accountability.

He said that the demutualisation of the Nigerian Exchange converted its legal structure from a company limited by guarantee to a public company, with an expectation to make and distribute profit to the shareholders.

According to Onyema, the demutualisation is in line with the growing trend in the Securities industry, especially among members of the World Federation of Exchanges.

Speaking on the topic: “The Promise of the Nigerian Stock Exchange Demutualisation,” Onyema highlighted some direct benefits of demutualisation.

He listed the benefits as wider access to capital, flexibility to explore new growth opportunities, enhanced competitiveness and greater ability to mobilise funds.

Onyema added that demutualisation would enhance competitiveness, greater ability to mobilise funds to upgrade systems, attract high-calibre staff and expand to new markets, among others.

Speaking on the advantages of demutualisation for the Nigerian capital market, he said it would help diversify systemic risk in the financial market.

According to him, it will act as a positive force in propelling the Nigeria economy by virtue of its potential to overcome liquidity challenges by African exchanges.

“It allows the demutualised exchange to create wealth for the general populace via listing on the capital market,” Onyema said.

The Vice-Chancellor of Greenfield University, Prof Seth Akutson said the most important aspects to consider were the reform measures put in place to ease the transmission process during this era.

Akutson noted that the impact of demutualisation on the Gross Domestic Product (GDP) of the country should be properly harnessed while unveiling new trading techniques to be applied during the process.

A former Vice-Chancellor of Nasarawa State University, Prof Mohammed Mainoma said that demutualisation had opened greater growth opportunities.

Mainoma said the initiative enhanced capital inflow, corporate governance structure, computerisation and technology investment, among others.