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Africa | Corporate Governance

Nigeria’s Code: Attaining good governance in 2019 On 15 January 2019, after about five years of attempting to put together a ‘uniform’ code of corporate governance, Nigeria finally unveiled its national corporate governance code.

The Nigerian Code of Corporate Governance 2018 (2018 NCCG) was issued by the Financial Reporting Council of Nigeria (FRC) by virtue of Sections 11(c) and 51(c) FRC Act 2011. A Regulation; Adoption and Compliance with the Nigerian Code of Corporate Governance 2018 issued by the Minister for Industry Trade and Investment further to powers conferred by Section 73 of the FRC Act mandated compliance with the 2018 NCCG. Th is article provides a commentary of the Nigerian Code of Corporate Governance 2018, highlighting some of the central provisions of its 28 Principles and their associated recommended practices, while also comparing the Code with some selected national codes namely; the National Code of Corporate Governance for Mauritius 2016 (Mauritius Code), the King IV Code on Corporate Governance for Southern Africa 2016, as well as the UK Code of Corporate Governance 2018 (see chart opposite). The article highlights the entrenchment by the 2018 NCCG of some international best and leading corporate governance practices, such as board evaluation, board induction, establishment/definition of independent non-executive director (INEDs) roles, company secretary’s empowerment,

The Nigerian Code of Corporate Governance 2018 is an important step forward Dr Nechi Ezeako

Executive Director, Institute of Directors, Nigeria board diversity, etc. The article notes that the 2018 Code is a reflection of the peculiarities of the Nigerian business environment and confi rmation of the corporate governance concept of ‘no one size fits all’. The 2018 NCCG is the outcome of the review of the 2016 National Code of Corporate Governance (private sector). The unveiling of the Code was done by the Vice President of the Federal Republic of Nigeria, Professor Yemi Osinbajo, GCON, with the support of the Minister in charge of the supervising Ministry for the FRC, the Ministry of Industry, Trade and Investment, Dr Okey Enelamah. The journey to a national corporate governance code in Nigeria has been a remarkable one, playing out various acts and scenes like a veritable drama, complete with artists. However, major regulators and other corporate governance stakeholders, not least the FRC, rightly heaved a sigh of relief that the Nigerian nation finally demonstrated, in

a very practical way, its readiness to welcome the global business community by stipulating clear principles, standards and practices guiding the nation’s business environment. It will be recalled that the 2016 National Code of Corporate Governance (2016 NCCG), the review of part of which (Private Sector Code) birthed the new Nigerian Code of Corporate Governance 2018 (2018 NCCG), was suspended by the Minister barely three months into its release by the FRC. The 2016 Code was first of its kind, in that not only were its far-reaching provisions mandatory, but they also went beyond the private sector to include codification of standards for public sector as well as not-for-profit entities. Given the novelty of the issues introduced, the need for extensive engagements with critical stakeholders was recognised. Although, however, some engagements were done, the FRC under its previous leadership was perceived as merely ‘checking the box’ of stakeholders’ engagements and not sincerely taking on board the outcomes of these engagements. The result was significant pushback from different stakeholder groups, including the churches/religious organisations, some of which, not being accustomed to the level of accountability prescribed by the new Code, were reluctant to accept this. Similarly, some top audit fi rms were opposed to the level of objectivity checks introduced by the 2016 code, notably:

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The introduction of joint-audit for organisations in which, if one of the joint auditors is a big fi rm, the other must be a small fi rm

LOOKING AHEAD The future direction of governance within Nigeria

90 Ethical Boardroom | Spring 2019

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