Multinational companies and preference for expatriate CEOs

The recent announcement of Mr Jordi Borrut Bel as the successor of Nigerian Breweries Plc interim Managing Director, Johan Doyer, brought to the fore the preference of expatriates by multinational for the chief executive position.

In the 1970s, 1980s and 1990s, there was a deliberate policy by multinationals to identify outstanding Nigerians who could be groomed as successors to the expatriates who were running the companies at the time. It was that policy that threw up outstanding managers such as Chief Ernest Shonekan of UACN, Dr Christopher Kolade of Cadbury, Messrs Felix Ohiwerei and Festus Odimegwu of Nigerian Breweries, Mr Dayo Lawuyi of Dunlop, Mr Rufus Giwa of Lever Brothers, and a host of others. But now, the trend is changing, expatriates are deliberately sourced to head multinationals while Nigerians are sidelined.

A Nigerian Tribune survey, conducted in December 2017, which involved 29 multinational companies, showed that 21 of the companies were headed by expatriates, while only eight were headed by Nigerians. The companies surveyed cut across different sectors of the economy.

Shell Petroleum Development Company (SPDC) is headed by Osagie Okunbor, a Nigerian, as the Managing Director, while Jeffrey Ewing, an expatriate, is Chairman and Managing Director of Chevron Nigeria. Mobil Nigeria has an expatriate, Paul McGrath, as its Chairman and Managing Director, just as MTN Nigeria, which is headed by Ferdinand Moolman, an expatriate.

The Managing Director of Nestle is Mauricio Alarcon, an expatriate, while that of Total Nigeria is Jean-Philippe Torres, also an expatriate. Unilever’s Managing Director is Mr. Yaw Nsarkoh, an expatriate. The Managing Director of Guinness Nigeria Plc is Mr Peter Ndegwa, also an expatriate.

Mr Wolfgang Goetsch, an expatriate, is the Managing Director of Julius Berger, while Cadbury Nigeria Managing Director is Mr. Muhammad Amir Shamsi, also an expatriate. P&G Nigeria is headed by Mr George Nassar, an expatriate, just like PZ, whose Managing Director, Mr. Christos Giannopoulos, is also an expatriate.

GlaxoSmithKline Nigeria is headed by Bhushan Akshikar, an expatriate; British American Tobacco (BAT) Nigeria is headed by Chris McAllister, an expatriate; 7-Up Bottling Company is headed by Ziad Maalouf, an expatriate; and Lafarge Africa is also headed by Mr. Michel Puchercos, an expatriate.

Mr. Henry Oki, Managing Director of Halliburton Energy, is a Nigerian, just as Mr Niyi Yusuf, Managing Director of Accenture Nigeria; Juliet Ehimuan Chiazor, Country Manager of Google Nigeria; IBM Nigeria Country General Manager, Dipo Faulkner; May & Baker Nigeria Managing Director, Mr. Nnamdi Okafor; Multichoice Nigeria Managing Director, Mr. John Ugbe, and Airtel Nigeria Managing Director, Segun Ogunsanya.

Addax Petroleum Managing Director, Cor Zegelaar, is an expatriate, Ecobank Nigeria Managing Director, Mr. Charles Kie, is an expatriate, MRS Oil Managing Director, Mr. S.B. Prasad, is an expatriate; Ericsson Nigeria Managing Director, Rutger Reman, is an expatriate, Nigerian Breweries Managing Director, Mr. Johan Doyer, is an expatriate and Head of Maersk Group in Nigeria, David Skov, is an expatriate.

A number of Nigerians who spoke with the Nigerian Tribune about this development expressed their frustration over the emerging trend of Nigerians being by-passed by multinationals for the chief executive position.

According to Mr Festus Adejuyigbe, who runs a recruitment agency, “It is frustrating to note that in spite of having the required skills, one cannot aspire to the highest office in one’s place of employment for considerations outside competence. The most worrying part of this development is that Nigerians are not even given a chance to compete for these positions in most cases. What usually happens is that the global head office or the regional office just sends the names of the preferred candidates without even allowing qualified Nigerians a chance to compete for the positions. This is not right.”

This tallied with the view of Mr Azeez Tahir, who once worked with a multinational company. He said some of the multinationals deliberately opt for foreign nationals, not just to spite Nigerians but as a means of safeguarding their investments.

He said, “I think the rationale is simple. Though they make it look as if Nigerians are unfit for those positions, I do not think that is really the case. I think it is a matter of putting one of their own in charge of their investment.”

He added that it is not enough for the multinationals to have their people on the board in non-executive capacity. “Many of them, at least the ones I had worked with, prefer having their people in executive positions either as the overall boss or someone quite close to that position.”

The view of Tahir is supported by a study carried out by a group of Nigerian academics.

In a 2016 article, Multinational Corporations and Their Effects on Nigerian Economy, published in the European Journal of Business and Management, J. Eluka, Ndubuisi-Okolo Purity, and Anekwe Rita Ifeoma, quoting Bernadine H.J., identified three models of employment by multinational companies. These are polycentric, ethnocentric and geocentric. According to them, ethnocentric model is based on the assumption that management and human resource practices are critical core competence to the multinational’s competitive advantage and as such should be properly handled. They add that with this model, foreign subsidiaries are not given real autonomy as major decisions are made by the headquarters. In addition, the bulk of the management staff is usually sent from the headquarters and comprises mainly the parent company nationals.

They explain that multinationals running on polycentric model allow their subsidiaries considerable measure of freedom with respect to decision making and personnel recruitment. Management and other members of staff are usually sourced competitively from the local labour market.

The article says companies operating geocentric model are usually integrated. There is no distinction among staff members irrespective of their location on the globe. Key positions are filled by the most qualified individuals regardless of nationality, race or colour.

The conclusion of the article authors is that many of the multinational companies in Nigeria are operating the ethnocentric model.

However, a university lecturer, Professor Benjamin Nduku, does not share this sentiment. Nduku, Director at the Institute of Natural Resources, Environment and Sustainable Development, University of Port Harcourt, Rivers State, linked the preference of multinationals for expatriates to the decline in the productivity of Nigerian executives.

Nduku, while speaking at an award presentation for the Nigerian Content Development and Monitoring Board annual oil and gas undergraduate essay competition in the Niger Delta, recently, lamented Nigerians’ lack of capacity to function effectively in the oil and gas industry despite efforts to boost indigenous capacity.

According to the don, “Even the indigenous companies are recalling retirees to work in the industry because many of our youths are not ready.

“We must get to the position where we have to do a radical paradigm shift to get our young people interested in this industry. We must be moving towards knowledge-driven economy, and use global thinking and competitiveness for indigenous growth.

“Knowledge is a global thing. We must prepare our children so that they can play along.”

Speaking along the same line, Dr Bimbo Okunade, a human capital development consultant, said no company would look beyond its shores for recruitment if it could get the desired competence from within the country.

He said, “What Nigerians need to realize is that the world has become flat. In fact so flat that companies want to have the same standard in every part of the world. With globalization, there is no room for mediocrity. If Nigerians want first class jobs they have to offer first class services. In the world that we are in now, there is no room for sentiments; every company goes for the personnel that can deliver to it what it wants no matter where such individuals may be located.”

Although Okunade said the issue of certain multinationals preferring to have nationals of their home countries head strategic operations could not be ruled out, he noted that it is not the usual practice because the system in operation globally does not give room for mediocrity but meritocracy.

The human capital development expert added, “Let’s cast our minds back to the time of Dr Christopher Kolade, Chief Ernest Shonekan and Mr Felix Ohiwerei, would anyone think of any expatriate replacing them? It was practically inconceivable because those men were world class, they could hold their heads high anywhere in the world. So, rather than lament and complain over being sidelined, what should be done is that Nigerians in the corporate world should increase their competence and capacity so that they would be the preference of multinational companies for top notch positions.”

Mrs Chioma Obiajulu, an economist, advanced Okunade’s argument further.

She said, “Why do Nigerian construction companies prefer artisans from other West African countries? Are there not artisans in Nigeria? The reason is simple; these people from the neighbouring countries deliver value while Nigerian artisans hardly do. Whoever engages a workman expects value delivery, if he is not sure he will get the value, he will go elsewhere. That is how I see this development. Instead of looking for excuses, we should have a program that will equip our executives with skills that will make them have global relevance. If a company has a staff member in Indonesia who can perform a task better than the personnel in Nigeria why will it not move the person in Indonesia to Nigeria?”

Obiajulu added that excellence has no tribe or colour. “Those who have repeatedly shown that they can deliver on expected terms will always have an edge over others. That is the reality of our times and the earlier Nigerians get to understand that, the better for us,” she said.