Contact Info: co-authored
Career: Olayemi Akinpelumi
Publications

On the 15th of January 2019, the Honorable Minister for Industry, Trade and Investment issued the Nigerian Code of Corporate Governance 2018 (“National
Code”), which was earlier approved by the Financial Reporting Council of Nigeria (“FRC”) pursuant to the authorities vested in them in the Financial Reporting Council of Nigeria Act.

On the 15th of January 2019, the Honorable Minister for Industry, Trade and Investment issued the Nigerian Code of Corporate Governance 2018 (“National
Code”), which was earlier approved by the Financial Reporting Council of Nigeria (“FRC”) pursuant to the authorities vested in them in the Financial Reporting Council of Nigeria Act.

In addition to the National Code is the Regulation on the Adoption and Compliance with the National Code (“Regulation”) issued by the FRC. Further to the Regulation and additional guidelines subsequently issued by the FRC for reporting on the National Code, certain entities will be required to report on their compliance with the National Code from 31st March 2021. These entities are:

(a) all public companies (whether a listed Company or not).
(b) all private companies that are holding companies of public companies or other regulated entities;
(c) all concessioned or privatised companies; and
(d) all regulated private companies being private companies that file returns to any regulatory authority other than the Federal Inland Revenue Service (FIRS) and the Corporate Affairs Commission (CAC).

Clarity seems to have been infused into what was initially thought by corporate governance analysts to be a convoluted monitoring process for the implementation of the National Code. The National Code[1] states that implementation of the National Code will be monitored by the FRC through the sectoral regulators[2] and registered exchanges that are empowered to impose appropriate sanctions based on specific deviations from the National Code.

The FRC may, in addition, conduct reviews on the implementation of the National Code where deviations recur. The engagement of the FRC with other sectoral regulators are gradually yielding positive results and providing the needed clarity with respect to synergy in implementation and enforcement of the National Code.

 

The State Of Sectoral Codes

With the introduction of the National Code by the FRC, it is expected that all existing sectoral codes of corporate governance will be withdrawn, making the National Code the uniform and only Code of Corporate Governance in Nigeria. In anticipation of the foregoing, Securities and Exchange Commission in October 10th, 2020 indicated on its website that the National Code replaces all existing sectorial Codes of Corporate Governance in Nigeria.

In matters where sector specific corporate governance requirements are not covered in the National Code, a sectoral guideline will then be issued by the relevant sector regulators. Let us review the status of a couple of existing sectoral codes and their alignment with the National Code.

 

Download the full Article