Stakeholders pick holes in draft NCCG

Stakeholders and private sectors in the country have disagreed and faulted the modalities of the draft national code of corporate governance (NCCG).

At the final public hearing organised by the Financial Reporting Council (FRC) in Lagos, a representative of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Ebo Udoma-Eniang said the general consensus is that the code should not be made mandatory.

She explained that the global trend is to have corporate governance codes that is devoid of various penalties, but creates more of guidelines and frameworks that will enable both the private sector operators and other stakeholders to do smooth sailing businesses.

Udoma-Eniang also reminded the FRC that “there is decision of the federal high court that says the FRC cannot regulate private companies, in which case even tucking private companies into the code is illegal.”

Commenting also at the last public hearing, former Managing Director and Chief Executive of FITC, Dr Oladimeji Alo appealed to the FRC to have a code that would enable companies and its board of director to grow, rather than create factions that could destroy the organisations.

Dr Alo said moving from an era where there was no code at all; to extreme conditions of tough draft code will be difficult and counterproductive.

Responding to questions on the role of the FRC, in creating a statutory code of corporate governance for public and private organizations, and also for religious bodies, Executive Secretary of FRCN, Mr. Jim Obazee said the FRC Act No 6, 2011 empowers the council to issue code of corporate governance and enforce compliance with the code in both public and private sectors of the economy.

He explained that the Federal Government’s decision to adopt the NCCG is aimed at raising the standard of running entities in Nigeria, and should not be misunderstood, adding that the importance of the corporate governance for success as well as for national development cannot be ignored.

Obazee noted that the benefits of the National Code of Corporate Governance if adopted 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.