The Federal Government of Nigeria has unveiled the Nigerian Code of Corporate Governance ("NCCG" or the "Code") drafted by the Financial Reporting Council of Nigeria ("FRC").
Background to the new Code
Sometime in 2016, the FRC released three draft Codes of Corporate Governance for Private Companies, Public Companies and Not-for-Profit Entities. The Codes were suspended as a result of the controversy generated after the release. In exercising its functions based on Sections 11c and 51c of the FRC Act, the FRC drafted a new Code that consolidates the Codes for private and public companies while the Code for Not-for-Profit entities remain suspended.
Objectives of the Code
The Code seeks to institutionalise and encourage better corporate governance practices in Nigerian Companies. In particular, the Code is principle based and requires the "apply and explain" approach. Companies are to adopt the practices in the Code and explain the reasons for adopting them in line with their activities. The FRC will monitor the implementation of the Code through sectoral regulators, who will impose appropriate sanctions for infractions, based on the sectoral laws and regulations.
Structure of the Code
The Code is in 7 Parts and contains 28 Principles. It covers the Board of directors, Audit, Relationship with shareholders, Business conduct with ethics', Sustainability, Transparency and Definitions.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.