FRC, SEC, CBN move to harmonise corporate governance code

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By Chioma Obinagwam

The Financial reporting Council of Nigeria (FRC), the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) have taken giant steps towards harmonizing and finalizing the National Code of Corporate Governance (NCCG).

This follows the visits of members of the National Committee of the National Code of Corporate Governance to SEC and CBN respectively in Abuja.

Speaking while his team paid a courtesy visit to SEC, the Chief Executive Officer of FRC, Mr. Jim Obazee said, they were there to seek the Commission’s support on the harmonization of the NCCG draft.

“In this respect, we have come along with us, the Chairman of the national committee of the national code of corporate governance and some of his members to discuss some areas that your Commission may require clarification.”

His words, “I believe that if we collaborate effectively in addressing this corporate governance regulation, we will end up establishing our respective institutions as potent crisis managers,”

He also used the occasion of the visit to solicit the Commision’s support to establish a National Online Account Reporting Platform, which he said, was necessary to make vital information such as audited and unaudited financial statements of quoted companies readily available to relevant stakeholders.

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On current efforts being made by the Council to sanitize financial reporting, he disclosed at the visit that as at today only accounting professionals recognized by an act of the National Assembly can sign accounts. Those with foreign qualifications will have to domesticate them, that is by taking membership of the Institute of Chartered Accountants of Nigeria (ICAN) or the Association of National Accountants of Nigeria (ANAN) before they can be qualified for the purpose.

In his remarks, the Director General of SEC, Mr. Mounir Gwarzo pledged his Commission’s support to the harmonization of the draft National Code of Corporate Governance and establishment of the Platform.

He also appealed to FRC to make it easier for companies to get their audited accounts approved by the Council.

He said that the complexities, which some companies were going through and the time it takes FRC to make approvals were making the companies to constantly submit their annual financial reports late.

“This is one area I want us to work together on so that these companies will not continue to receive sanctions from us,” he said.

He also urged the Council to continue to hold more of such consultations with all relevant stakeholders so as to come out with a final draft that is largely acceptable to all.

Recall that on January 17, 2013, the Federal Government inaugurated a steering committee for the development of a unified National code of corporate governance. The committee was set up in line with Section 119 (c) of the Financial Reporting Council of Nigeria Act No.6 of 2011, which empowers the council as the only statutory body responsible for the development of code of corporate governance practices in both public and private sectors of the economy.

In accordance with the mandate conferred on it by the act, the FRC had so far held several public hearings on the draft national code of corporate governance with relevant stakeholders with a view to coming out with a largely acceptable code to all stakeholders and the last of such public hearings were held on June 30, 2015 for Public and Private Sectors and July 1, 2015 for Not-For-Profit Organizations.

The next public hearing on the draft national code of corporate governance is slated for next month.

The benefits of the National Code of Corporate Governance among others include increased management credibility, more long-term investments, lower cost of capital, higher shares value, more disclosures, better investment decisions and transparency in financial management.