Corporate Governance – MTNN’s Experience MTN Nigeria By: Ahmad Farroukh Presented By: Uto Ukpanah May 2010

1. Corporate Governance – MTNN’s Experience MTN Nigeria By: Ahmad Farroukh Presented By: Uto Ukpanah May 2010

2. Aim of Presentation

3. Corporate Governance ‘I am becoming less and less comfortable with the phrase “corporate governance” – not because of its content but because it has been so widely used that it may become meaningless. There is a danger that it will be recited as a mantra, without regard to it’s real import. If that happens, the tendency will be for those who have to pay regard to it to develop a tick box mentality. The attitude might be ‘ ‘Yes, we have a state – of the art corporate governance model; yes it is committed to writing; and yes, the Company Secretary has checked that each item is in place and has included a statement to that effect in the annual report. Therefore there could be no problem in the corporation’. Royal Commissioner, Justice Owen Royal Commission on HIH Insurance Collapse 2001

4. Corporate Governance- Definitions • The practices, principles and values that guide a company and its business every day, at all levels of the organisation; • Corporate governance comprises the long-term management and oversight of the company in accordance with the principles of responsibility and transparency.

5. Corporate GovernanceWhy? • Improves access to capital • Leads to a better system of internal control, thus leading to greater accountability and better profit margins • Paves the way for possible future growth, diversification, or a sale, including the ability to attract equity investors – nationally and from abroad – as well as reduce the cost of loans/credit for the company

6. Corporate Governance Why ? • Provides the proper incentives for the Board and Management to pursue objectives that are in the interest of the company, shareholders and other stakeholders, as well as facilitate effective monitoring.

7. MTN – Corporate Milestones • Incorporated 8th November 2000 • Digital Mobile Licence (DML) 9th February 2001 • Commenced operations 8th August 2001 • Universal Access Licence 1st September 2006 • 3G Licence 1st May 2007 • Submarine Cable Licence 1st January 2010 • Part of the MTN Group

8. Leadership Integrity Innovation Relationships ‘Can do’ MTN: Core Values

9. MTN: Governance Structure • Shareholders • The Board • Management • Employees • Other Stakeholders

10. MTN: Corporate Governance Framework • Institutional and policy framework for ethical practice • At MTN we have clearly defined and communicated code of ethics

11. MTN: Corporate GovernancePolicies MTN Corporate Business Principles • Whistle Blowing Policy • Document Retention Policy • Guidelines in the Conduct of Governmental Affairs • Code of Ethics

12. MTN: Corporate GovernanceAffiliations • Convention on Business Integrity • United Nations Global Compact

13. MTN: United Nations Global Compact (UNGC) • We have participated in the following UNGC initiatives: • Communication on Progress (COP) : an online publication for company participants which showcases good practices in line with the Global Compact’s ten principles. • RESIST Project: Participated in UNGC project named ‘Resisting Extortion & Solicitation in International Sales and Transaction’ (RESIST). MTNN suggested practical ways of dealing with real-life situations of corruption and bribery. • UNGC Publication: Provided key content for UNGC publication titled The Business Case Against Corruption.

14. Corporate Citizenship • Adding value • Corporate Social Responsibility

15. MTN: Adding Value • GSM has brought empowerment, and has unleashed previously underrated potential in Nigerians: • Millions of Nigerians are today connected to each other and the rest of the world • Millions of businesses have been created and enhanced since the introduction of GSM • Thousands of jobs have been created directly and indirectly • Nigerian professionals have all skilled up to accommodate the new standards required • Sponsorship of sports, music and various laudable causes have reached new heights

16. MTN: Adding Value • Championing of best Practise QoS KPIs reporting • Ensuring the prompt payment of interconnect receivables, AOL, Spectrum fees, Numbering fees etc etc • Promotion of self regulation in collocation & infrastructure sharing • Championing reduction of multiple taxation and regulation

17. MTN: Adding Value • Active input in industry initiatives, proposed regulations and guidelines e.g. SIM Registration, Corporate Social Responsibility, SMS interconnect rate, interconnect rate review • Spearheading Industry public campaign on perceived EMF health concerns from mobile telephony installations • Championing Best Practise Regulatory Environment

18. Adding Value

19. Adding Value • GSM has brought empowerment, and has unleashed previously underrated potential in Nigerians: • Millions of Nigerians are today connected to each other and the rest of the world • Millions of businesses have been created and enhanced since the introduction of GSM • Thousands of jobs have been created directly and indirectly • Nigerian professionals have all skilled up to accommodate the new standards required • Sponsorship of sports, music and various laudable causes have reached new heights

20. Adding Value: MTN Payments as Govt. Taxes & Other levies - 2001 to May 2008

21. MTN Nigeria Foundation Corporate Social Responsibility

22. MTN: Corporate Social Responsibility ‘Companies in developing nations face some of the most difficult investment climates in the world. For them CSR is not a luxury good. It is common sense’ - Peter Woicke, IFC Vice President

23. CS I – Key to MTN’s business strategy; Align CSI with MTN’s brand essence. Corporate Social Investment THE MTN FOUNDATION

24. CSR – Why? • CSR is an all round responsible way of doing business • CSR goes beyond the statutory obligation to comply with legislation • In the last decade, directional signals point to increased corporate investment and an apparent transition from giving as an obligation but to giving as a strategy

25. CSR – Why? Hence, MTN adopted a corporate culture to do good because: • Not only is it important to give back to communities in which we operate, it is also smart business • Healthy communities are important to the wellbeing of society and the overall economy At MTN, CSR is an integral part of our business strategy, thustheMTN Foundation was established as the vehicle for MTN’s aggressive CSI agenda.

26. Key Focus Areas and Objectives Alleviating the health challenges of Nigeria Health Restoring human dignity through self sustenance Economic Empowerment Bridging the digital divide Education About the MTN FOUNDATION In 2003, The Board of MTN Nigeria approved the establishment of a Foundation to manage the organisation's Corporate Social Responsibility initiatives. The MTN Foundation was formally incorporated in July 2004. Mission “To improve the quality of life in communities all over Nigeria”

27. MTNF - Achievements

28. MTNF – Education Portfolio

29. MTNF Project C.L.E.A.N - Alesinloye Market, Ibadan

30. MTNF – Economic Empowerment

31. CSR - Challenges • Sustainability of project initiatives • Overwhelming request from communities • Multiple areas of need in Nigeria and govt’s inadequacy to meet basic needs, thus putting pressure on corporate organisations • Managing stakeholders’ expectations

32. “If a country does not have a reputation for strong corporate governance practices, capital will flow elsewhere. If investors are not confident with the level of disclosure, capital will flow elsewhere. If a country opts for lax accounting and reporting standards, capital will flow elsewhere. All enterprises in that country suffer the consequences.” Arthur Levitt, former Chairman of the US Securities & Exchange Commission A case for good corporate governance

33. Future Outlook • Continue to build on our corporate governance structures • Constructive engagement with shareholders and other stakeholders • High quality of financial and non-financial disclosure • Continue to invest in our communities • Lead by example

34. MTN – Corporate Governance • Thank you for your attention.