National Code of Corporate Governance effective 2016

By Chioma Obinagwam

The Financial Reporting Council of Nigeria(FRC) has said that the much deliberated National Code of Corporate Governance (NCCG) for the country would take effect in the first quarter of 2016.

The Chief Executive Officer, FRC, Mr. Jim Obazee disclosed this while addressing the press at of the 12th annual corporate financial reporting summit held in Lagos.

Obazee stated that the private sector code as well as that for not-for-profit would be operational before the end of the first quarter of next year.

He, however, noted that delay in the implementation of the public sector code would be due to slight legislative constraints as it would have to be approved by the Federal Executive Council (FEC).

“Once we conclude this summit, we would definitely progress with the NCCG. In the first quarter of 2016, the private sector code and the not-for-profit code would be operational. For the public sector code, we still intend to go to FEC because there are already corporate governance structures within legislations by different government bodies,” he said.

“So, we need the government to make a pronouncement wherein there would be like a general harmonisation such that irrespective of what you have, you are to comply with the National Code of Corporate Governance for Public Sector. But, within the first six months of next year, we would go through our Minister, to the FEC, to secure the nod of the government to implement that,” he continued.

He noted that the theme of the summit which was “National Code of Corporate Governance for Nigeria: A New Dawn in Compliance was chosen to educate the public on the revised code and served as a second public hearing, especially on the revised areas.

On his part, the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah stated the need for stakeholders to understand the macro and micro implications of the national code of corporate governance on enterprises as well as appreciate the FRC Act No. 6, 2011, its implication in general and corporate governance compliance requirements.

“I am confident that the proper implementation of NCCG will lead to further attraction of Foreign Direct Investment(FDI) with the resultant effect of employment generation for Nigerians,” he said.

Meanwhile, the Chairman, Steering Committee, NCCG, Mr. Victor Odiase said that strong corporate governance standards is very critical within a significantly concentrated ownership environment like Nigeria as it would improve fairness to minorities and stakeholders, increase access to capital as well as attract investors by ensuring that the business environment is fair and transparent.

He said:  “Our committee’s message today can be summarised in these few words: attracting investment requires protecting investors and no country has a divine right to FDI. In our country today, neither the quality of law nor its enforcement can be said to be very adequate.”

“We do not as a nation have an enforceable concept of the fiduciary duties that controlling shareholders, directors and managers owe to investors- particularly the minorities. Investor protection requires both law and regulation. Investors, whether equity or debt, will not invest in a country or company regarded as unstable, corrupt or utterly lacking basic protections for their investments and rights. Let us give National Code a chance,” he continued.