Minister of Trade and Investment, Mr. Olusegun Aganga
By Yemi Akinsuyi
The Federal Government has inaugurated a Steering Committee that will develop the country’s National Code of Corporate Governance.
The inauguration of the Committee is in accordance 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.
Speaking during the event, the Minister of Trade and Investment, Mr. Olusegun Aganga, said the committee would develop a unified Code of Corporate Governance that would enable the FRC to act “as the national coordinating body responsible for all matters pertaining to corporate governance in both private and public sectors of the Nigerian economy; promote the highest standards of corporate governance principles and practices and encourage sound systems of internal control and information systems control to safeguard stakeholders’ investment and assets of public interest entities, among other things.”
He noted that the need for a comprehensive and mandatory code had become imperative given the current multiplicity of corporate governance codes across the country, adding that the new initiative would instill the culture of transparency, accountability and improve the country’s Doing Business Ranking.
Aganga said, “This administration views the issuance of a National Code of Corporate Governance as a very important deliverable that can be used to enhance our national competitiveness and address some socio-economic issues, including corruption and lack of independence.
“It is also an opportunity to raise the bar in the public and private sectors and to ensure that there are stiff penalties and that directors are personally liable for their actions and inactions. All of these are efforts aimed at improving our investment climate and foreign direct investment flows and enhancement of our competitiveness and international perception.
He added: "If you look at the global crises (financial and banking crises), a lot of them have been traced to failure in corporate governance. There is a difference between managing a company or corporation and the Board. The Board determines in many ways, the values and culture of an entity and plays a big role in terms of improving the competitiveness, profitability and productivity of those entities.
“One of the things that we haven’t had for so many years is an effective Corporate Governance Code for the whole country that is harmonised. Although we have something from the regulators, all of them are addressing the issue in terms of regulatory matters but there’s not one code that is comprehensive and harmonised. So, this is the first time that we are having a comprehensive corporate governance code. This is will help to improve our Doing Business Ranking.”
According to the minister, one of the reasons the country is not where it’s supposed to be in the Global Doing Business Ranking “is the lack of good corporate governance culture in all our entities. Therefore, this initiative is a big game-changer for Nigeria as it will go a long way in terms of improving our rankings in all those indices,” he noted.
Speaking during the event, the Chief Executive Officer, Financial Reporting Council, Mr. Jim Obazee, said the agency was partnering the World Bank and other development partners to ensure the timely and successful completion of the project.
He said: “The World Bank, DfID and the United Nations are in support of this project. Already, the World Bank has put it in the national agenda in the Economic Reforms and Governance Programme that it has with the Federal Government. They will support with the expertise and finance if need be”.
In his acceptance speech, Chairman of the Steering Committee on National Code of Corporate Governance, Mr. Victor Odiase, said the committee would work assiduously to achieve the purpose for which it was set up.
He said, “I want to assure that on behalf of myself and my colleagues, diligence and selflessness shall be our guiding spirit in carrying out this national assignment.”