The Financial Reporting Council (FRC) of Nigeria has called for the acceleration of getting a corporate governance code for the public sector in Nigeria.
Ambassador Shuaibu Adamu Ahmed, Executive Secretary/CEO of Financial Reporting Council (FRC) of Nigeria made the call at the 2023 Annual Corporate Governance Conference tagged “ESG and Corporate Governance: Aligning Strategies for Sustainable Success.
Ahmed spoke against the background of a statement made recently by the former Chairman, of Nestle Nigeria Plc, Chief Olusegun Osunkeye that there is a compelling need to introduce corporate governance to the Nigerian public sector for enhanced regulation of the structure, operations, and activities of the Ministries, Departments and Agencies (MDAS).
He said:
- “Osunkeye spoke to the president of the IOD about this, he also challenged the FRC to ensure that this is given top priority. That’s why he said that is the number one agenda for the president of the IOD. He mentioned the importance of getting a code for the public sector and he made some other remarks relating to that”.
Stakeholders to ensure the release of the code before the end of the year
He appealed to the president of the Society for Corporate Governance and other stakeholders to ensure that at least the first draft of the code is released before the end of this year.
- “And I want to appeal to the president of the Society for Corporate Governance, the president of the IOD is here, let’s take on that challenge.
- Let us ensure that before the end of this year, at least the first draft of the code for the public sector is released.
- The DG of the Bureau of Public Service is also here, who is also a key stakeholder in that direction. Please, let’s ensure that the first draft of that code is released before the end of this year,” he said.
Local initiatives to support ESG
Ahmed noted that a lot of local initiatives have been put in place to support ESG disclosures locally here in Nigeria.
He explained that the Financial Reporting Council’s Nigerian Code of Corporate Governance NCCG 2018, principle 26, requires entities to pay adequate attention to sustainability issues to ensure successful long-term business performance.
- “In addition, the Financial Reporting Council of Nigeria has made very notable progress in ensuring that ESG reporting is entrenched and mainstreamed in this country. First, in July 2022, the FRC led Nigerian jurisdiction to comment on the exposure draft of the first two standards.
- In September 2022, the FRC further led the voice of Nigerian jurisdiction to comment on a consultation paper on advancing public sector sustainability reporting.
- So. the International Public Sector Accounting Standard is also now trying to look at sustainability reporting focusing on the public sector.
- This was followed by a push by various professional groups towards the Financial Reporting Council to take a front seat in driving ESG disclosures in Nigeria. One such is the communique at last year’s ICAN Annual Accountants Conference, which urged the FRC to lead the sustainability reporting in Nigeria,” he said.
Ahmed noted that the FRC called on the federal government to commit Nigeria to early adopt the IFRS S1 and S2, and this led to the historic announcement of Nigeria in November 2022 at the Climate Change Conference COP 27 in Shamal Sheikh, Egypt, as the first country globally to declare its intention to early adopt the IFRS S1 and S2.
- “The FRC did not stop there. The IFRS S1 and S2 were launched globally on June 26, 2023, that is June this year, simultaneously across major global financial capitals around the world, ranging from London to New York, Frankfurt, and so on. Lagos, Nigeria is the only city in Africa that hosted this global and momentous event.
- The launch, which was held at the NGX, attracted participants from the ISFB and other African countries such as Zimbabwe, South Africa, and Ghana. To support capacity building and knowledge of the new standards, the FRC collaborated with the ISFB and the NGX between June 6 and 8, 2023, to organize a three-day workshop on IFRS S1 and S2.
- The workshop, which included industry-specific sections to explore how the standards apply across various sectors, also explored the basic concepts underpinning the standards, highlighting how these were developed to facilitate cost-effective industry-based disclosures by preparers that yield decision-making and useful information for investors.
- The workshop also highlighted how companies and investors are using the standards around the world.” he said.
New kind of corporate leadership
Dr. Jackie Chimhanzi, Chief Executive Officer of the African Leadership Institute, delivering a keynote address said the problems of corporate governance are accountability, transparency, and responsibility.
Chimhanzi noted that Africa needs a new kind of corporate leadership that would steer the continent through the challenging times.
- “I urge corporate leadership to respond to the ESG and corporate governance, we also need to be compassionate with the environment and communities. We need to address the issue of gender gap also,” she said.
What you should know
Osunkeye, who was the Chairman of the 18th Investiture of the Chartered Institute of Directors, Nigeria (CIoD) when Alhaji Tijani Borodo was inaugurated as the Institute’s 18th President, explained that both the private and public sectors should imbibe the key pillars of corporate governance for accelerated growth and development of the economy.
- “It is my view that the Nigerian Code of Governance in the Public Sector is urgently needed to regulate the structure, operations, and activities of the Ministries, Departments and Agencies (MDAS).
- “This is because both the private and public sectors should incorporate the pillars of governance – transparency, responsibility, accountability, and fairness in all ramifications to have a prosperous country,” says Osunkeye.
The renowned Corporate Governance ascribed the failure of the Central Bank of Nigeria (CBN) to publish its financial statements for seven years (2016 to 2022) to a weak corporate governance structure in the public sector.
According to him, the apex Bank failed to publish its financial statements despite the provision of section 50 of the CBN Act 2007 that the Audited Account shall be transmitted to the National Assembly and the President within two months after each financial year and be published in the Gazette.
