The Financial Reporting Council (FRC) of Nigeria has announced the release of an Exposure Draft (ED) of the Nigerian Code of Corporate Governance (NCCG) which it said it expected to enhance investors confidence and competitiveness.
The council disclosed this during a media Press briefing which took place in Lagos.
The new code has 28 principles of corporate governance and 230 good practices on how companies should implement the principles.
Mr. Daniel Asapokhai, Executive Secretary/Chief Executive Officer of FRC, noted that the new code is in line with best practices around the world in corporate governance. He further noted that investors are attracted to countries where international corporate governance code are in place. This he said will increase the country’s competitiveness and productivity.
In his words:
“I think this is something that is here to enhance national competitiveness. It would represent a national standard of good corporate behavior. It would provide a flexible framework and it has 230 recommended practices of what it means to effectively govern an institution. It also provides a framework for other sector regulators to contribute.”
Recall that in October 17, 2016, FRC, in line with section 50 of the FRC Act, 2011, issued a two-in-one National Code of Corporate Governance for the Private Sector and Not-for-Profit Organisations, and on October 28, 2016, the Private Sector and Not-for-Profit Organisations Codes were suspended by the Federal Government.
Consequently, on January 18, 2018, a fifteen-man Technical Committee, which comprised of representatives of regulatory agencies, industry professionals and experienced individuals with corporate governance expertise, was constituted by the Board of the FRC.
The Technical Committee was saddled with the responsibility of reviewing the suspended National Code of Corporate Governance 2016, considering the extensive public commentary received on the Private Sector Code, and come up with recommendations for the review and update of the code for the Board’s consideration.
The Nigerian Code of Corporate Governance for the Private Sector is, therefore, the output and updated draft of the National Code as submitted by the Technical Committee for the Board’s consideration.
Asapokhai further emphasized that the practices recommended in the code are flexible, scalable and can be applied by all organisations regardless of their size. He advised the companies that are governed by the Code to take advantage of the flexibility provided by the Code.
He also declared the FRC’s plan to embark on a public hearing and awareness in all geopolitical zones of the country, including the Federal Capital Territory, to elicit comments and reactions from key stakeholders, which will be taken into consideration in finalising the code.
The Financial Reporting Council (FRC) of Nigeria is a Federal Government agency established by the Financial Reporting Council of Nigeria Act No. 6, 2011, under the supervision of the Federal Ministry of Industry, Trade, and Investment.
The FRC is responsible for among other things, developing and publishing accounting and financial reporting standards to be observed in the preparation of financial statements of public entities in Nigeria and monitor compliance with reporting requirements specified in the adopted Code of Corporate Governance for related matters.