Can Companies Do Good?

Why is it that when people are angry with America, as they often are, they stone, write graffiti on or picket McDonalds, Citibank or Coca Cola offices all over the world? Those angry protesters are often educated people-social and environmental activists, undergraduates, trade unionists for instance-who know that the United States Government does not own these companies. Well in spite of that knowledge, in the minds of such people, those companies are somewhat synonymous with or at least representative of whatever it is America represents to them.

I read somewhere that if you wanted to study the history and evolution of management science and practices, it was sufficient to read the history and evolution of General Electric, a company which symbolised management best practices of the day from the 1930s. Whether it was decentralisation, centralised strategic planning with large corporate headquarters staff, delegation and empowerment, the conglomerate wave, acquisitions, restructuring and re-engineering, de-layering etc, GE symbolised and led the field and became synonymous at times with the development of those aspects of the field of management.

In the same way as the GE example above, if one wanted to study Nigeria’s political, economic and social development, you might just as well read the corporate profile and evolution of UAC of Nigeria Plc. If you wanted to research into the advent and impact of colonialism in Nigeria, the amalgamation of the Northern and Southern Protectorates, the River Niger trade and development of commerce and industry, the shift from subsistence to cash crop and export farming in Nigeria, just read accounts of UAC’s development and it mirrors those events and issues. When oil came, and we decided to seize the “commanding heights” of our economy through indigenization and nationalisation, UAC would be a useful case study.

When the oil money ran out and we began to ration scarce foreign currency through low profile, austerity measures, import licenses, “Form M”, and counter trade it reflected in the status and performance of UAC. The advent of the Structural Adjustment Programme and the need for new business models in the manufacturing sector is discernible from how the company has discarded its technical lines of business which became unsustainable in the light of devaluation and in which the company did not have competitive advantage. Indeed at some points in Nigeria’s history Frederick Lugard was in effect both CEO of UAC and Head of State of Nigeria. It is remarkable that in more recent history, another UAC CEO, Chief Earnest Shonekan also briefly became Head of Nigeria’s Interim Government in the wake of the 1993 election crisis.

These were some of the issues I reflected on last Wednesday as I observed UAC’s new logo launch. The company predates “Nigeria” with its history traceable to between 1672 and 1750 when the Royal Niger Company administered the territory that would later be known as Nigeria under a royal charter. The entity now known as UAC was formally created 128 years ago in 1879, following the merger of four companies trading up the River Niger. In 1974, forty percent of the company’s equity was acquired by Nigerians in compliance with the Nigerian Enterprises Promotion Act (NEP) 1972 and in 1977 the local equity holding was raised to 60 percent in accordance with NEP 1977. From 2000 UAC has been in a transition of sorts-business restructuring, change to value-adding businesses (as opposed to simply distribution for offshore producers) and focus on foods, real estate, logistics and automobile. More recently a sharper strategy as a food-focused conglomerate is discernible in UAC. The group also reflects renewed foreign investor interest in Nigeria with the acquisition by Actis of 20 per cent of the company’s equity. In 2007, both UAC and Nigeria have had new, younger leadership-Larry Ettah took over in January at UAC and Umaru Yar’adua took over in Nigeria in May. Both studied Chemistry at Nigerian Universities!

I find UAC’s strategic and leadership transition very interesting-a young man in his early forties taking control of Nigeria’s oldest and (previously perhaps most conservative) conglomerate; the new leader coming to the job with a clear strategy as a food-focused conglomerate, while diversifying the revenue base within the food business by creating different business units for its restaurants, foods, franchising and dairies businesses in addition to its existing water businesses; simultaneously improving value from its non-foods businesses in real estate, paints, logistics and automobiles; culminating in a strategic image change-all within his first year in office. But it is the fact that UAC under Larry Ettah seeks to combine re-invigorating the business with “doing good” that I find more interesting.

The company claims to have been “doing good, since 1879”-training managers and entrepreneurs; bringing goods and services to the people; providing vacation jobs and industrial attachments for students; providing stable, fulfilling careers for generations of Nigerian workers; and providing scholarships for children of serving and retired employees since 1948. Now UAC seeks to extend its “goodness” by instituting a scheme it calls the “Goodness League”, under which it would invest in financial and infrastructural support to legacy secondary schools in Nigeria. Managers and officers of UAC will also donate their time and knowledge in support of such schools. The company has already extended such support to two Lagos schools-St Finbarr’s College and CMS Grammar School.

A Reverend Father testifying on behalf of St Finbarrs thanked UAC for providing a 150 KVA generator for the school and fully equipping the physics laboratory. In CMS, the company is about to renovate and equip a technical block and they promise to extend the “league” to other legacy schools in Lagos and all over Nigeria. Hopefully soon they’ll get to my alma mater-Igbobi College! Many firms talk about Corporate Social Responsibility, but you get the feeling that for many of them, it simply is a cliché, that they regard as part of “looking good” rather than actually “doing good”. Listening to the passion in Larry Ettah’s voice and demeanour as he spoke about how it was education that gave someone like him the opportunity of becoming CEO of UAC, and how today’s decayed public educational infrastructure threatens to build dynasties of wealth and power on one hand and dynasties of poverty on the other, I suspect he is putting his money where his heart lies. Interestingly as Larry Ettah talks about “doing good”, Umaru Yar’adua speaks about being a “servant leader”. Hmmm.