18 — Vanguard, MONDAY, APRIL 11, 2016
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Turning great Ideas into great money
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COLLOQUIUM - From left: Principal Partner, Technique Loss Adjusters Limited, Mr. Ralph Opara; Deputy President, Nigerian British Chamber of Commerce (NBCC), Mr. Akin Olawore; Chairman, Nigerian Insurers Association and Managing Director, Linkage Assurance Plc, Mr. Gus Wiggle; Director –General NBCC, Mrs. Joyce Akpata and Director–General Chartered Insurance Institute of Nigeria, Mr. Rola Ahmed at the NBCC’s Nigerian Insurance industry Colloquium in Lagos.
FRC, shareholders poised for war over audit committee chair Continued from page 17 members, including the chairman provide that: The chairman of the audit committee should be a nonexecutive director, to be nominated by the members of the audit committee. Basically, members of the committee should be able to read and understand basic financial statements, and should be capable of making valuable contributions to the committee. Moreso, members of the committee should possess a thorough understanding of the company ’s business, its products and services, a reasonable knowledge of the risks facing the company and the essential controls the company has in place, inquisitiveness and dependable judgment and ability to offer new or different perspectives and constructive suggestions. Like any non-executive director, audit committee members should (at least as a group) possess a wide range of knowledge, skills and personal attributes: sound judgment; integrity and high ethical standards; strong interpersonal skills; and the ability and willingness to challenge and probe. Specifically, audit committee members must be able to understand the rules and, more importantly, the principles that underpin the preparation of financial statements. Shareholders agitate In his reaction, Mr. Boniface
Okezie, Chairman, Progressive Shareholders Association of Nigeria (PSAN) insisted that a shareholder need not possess any accounting qualification as adduced by FRC to sit as chairman of audit committee, arguing that no requirement like being an ICAN member was attached as pre-conditions to buy shares. He said: “FRC has no legal backing to say that shareholders should not be audit committee except they are ICAN qualified. That means you must be chartered accountant before you can serve in audit committee. We say no because that law is alien as far we are concerned. Nobody told shareholders that before you buy can shares, you must possess a degree; you must be an accountant or an engineer before you buy into
Like any nonexecutive director, audit committee members should (at least as a group) possess a wide range of knowledge, skills and personal attributes
a company. “The law says that shareholders should nominate two or three members to contest in audit committee in any quoted company, while the directors should nominate their own members. And all the directors nominated in the committee must not be chartered accountants. They can be from any profession. The requirement is that audit committee members should be able to read and write. The audit committee is not auditing account; they are looking at what the auditors, who are accountants, have done. They are reviewing what the auditors have done; they are looking at reports written by management. It is the audit committee that ensures that the recommendations made by the auditors to the management team are enforced; that is basically what they do. In terms of looking at figures, they can liaise with the auditors who are paid to audit the figures.” Continuing, he said: “So, what kind of law is Financial Reporting Council making. We rely on CAMA and FRC cannot make any law for us. Any law today governing shareholders activity is made by CAMA. The law of CAMA stipulates that if you can read and write and interpret figure, you can be audit committee members. That’s all! So, this law that is being proposed by the FRC should be discarded; we will fight it at the court of law. It has no Continues on page 19
aving a great business idea is only the first step in the journey to raising your business empire. Turning your business idea into a moneymaking venture requires raising the capital necessary to get your blessing running and that represents the next step of thousands of other steps. In starting your own business, the most challenging task you have to face as an entrepreneur is raising money as capital. The ability to raise money to start a business is one of the tests you must undergo as an entrepreneur. As daunting as it may seem, the challenge of raising money is not as tough as you think. It is no secret that in your quest to raise money to start your business you are bound to face a lot of obstacles. It would be very unfair of me to promise you otherwise. However, the good news is that it can be done as there are some people, some institutions and some organisations willing to look at investing in start – up businesses. There are many tried and tested ways of raising money to start your business which have been used by many famous entrepreneurs whose businesses have become household names, including Bill Gates (Microsoft), Michael Dell (Dell computers) and Richard Branson (Virgin), to name a few. For maximum success, you would do well to use a combination of different tactics to employ when you want to raise capital for your great business idea. Using feasibility business Ideas The first and basic key to raising money is to have a business idea that is feasible, that is practicable, and that is workable. You wonder why? The first question any investor you approach will ask is this: How profitable is your business idea? That is because no investor will want to put his money in a business that is impossible and not viable. They will also want to know the expected return on their investment and the time frame within which to recoup their initial investment. Before you embark on a quest to raise money, carry out a feasibility study to determine the profitability of your business
idea. Using a business plan Another prerequisite in the process of raising money for your business idea is a good business plan. One of your first moves when you want to source for funds to start your business should be to put a comprehensive business plan. Your business plan will include details of your background, education, training experience and any other personal qualities you possess. Your personal qualities and experience are often regarded as assets to your business. Your business plan should also explain in detail the modalities of how you are going to use the money you need. It should also explain in detail your proposed business idea, associated expenditure, the market research undertaken, and your financial projection and so on. Above all, your business plan should describe in detail what makes your business differs from that of your competitors. What will interest your investors the most about your business plan should state precisely what any investor should expect as returns on their investments and also, when and how you are going to pay it. Personality, Appearance and presentation style Next thing to consider is your personality, your appearance and your presentation style. When approaching an investor, remember you have only a chance to create an impression in his or her mind.Therefore,you must be conscious of your appearance, don’t appear rough and unkempt and, please, try to look professional. In the game of raising money for your business, appearance matters a lot. Now to your presentation style: your manner of presentation will determine the success or failure of your quest to raise money for your business idea to your investors with a high level of confidence, because the better you are at communicating your strengths to them, the better your chances of raising money. If you lack communication skills, read up books on the topic.