The Executive Secretary of the FRCN, Jimi Obazee was sacked yesterday following the controversy surrounding the corporate governance codes.
An immediate past Chairman of Nigeria Accounting Standard Board (NASB), which basically gave birth to FRC explained several key portions of the code that contravenes with the Company and Allied Matters Act (CAMA), the number one law guiding businesses in Nigeria. Here is how he explained it
“Section 246 of CAMA provided for a minimum of two Directors as against section 5.4 of the Code which provided for a minimum of eight directors.
“Besides contradicting the provisions of CAMA, it is a needless requirement which did not consider the avoidable financial burden. Section 7.3 of the Code provides that 75 percent vote of the full board is required to override the dissenting view of majority of Independent Non-Executive Directors, INEDs.This is contrary to section 263(2) of CAMA that says questions at board meetings shall be decided by a majority of votes and in case of equality, the Chairman has a second or casting vote.
This is similar to the conflicting provisions in sections 8.12.2; 8.13.2; 8.14.5 and 8.15.2 of the Code against section 263 (6) of CAMA which empowers each board committee to elect a Chairman of its meeting.
“Since there is an ongoing attempt to amend CAMA, Financial Reporting Council, FRCN, cannot and should not usurp the powers of the National Assembly.”Osunkeye submitted that the Code should be amended in conformity with the provisions of CAMA in order for it to be friendly to businesses.