Some shareholders on Monday hailed the decision of the federal government to suspend the implementation of the National Code of Corporate Governance introduced by the Financial Reporting Council (FRC).
The federal government on Monday ordered the suspension of the NCCG, and removed the Chief Executive Officer of the FRC, Mr. Jim Obazee. Speaking on the development, the President of Association for the Advancement of the Rights of Nigerian Shareholders (AARNS), Dr. Faruk Umar, said it was a good decision.
“I had opposed his(Obazee) attitude towards corporate governance at every annual general meeting(AGM), especially when he wanted to impose accountants as chairmen of audit committees even though they have no knowledge of corporate governance and finance,” Umar said.
Also, a founding member of Nigeria Shareholders Solidarity Association (NSSA)Alhaji Gbadebo Olatokunbo had condemned the over bearing attitude of FRC, saying it was unbecoming of a regulator.
According to him, instead of having adequate consultation with stakeholders, FRC was oppressing the people it ought to regulate and protect.
Before now, shareholders under the aegis of Independent Shareholders Association of Nigeria (ISAN), had said the NCCG would discourage the establishment of new business, kill existing ones and invariably stunt economic growth.
The National Coordinator of the group, Sunny Nwosu, who spokes on behalf of other members said a review of the code by ISAN revealed its suffocating effect on entrepreneurial aspirations and initiatives of Nigerians and persons seeking to establish business in the country.
“This is based on the provision of the Code that companies shall have not less than five directors. This provision is seen by ISAN as unnecessarily expansionary and costly for micro small and medium scale enterprises (MSMEs) noted as engine of the nation’s economy,” he said.
He added that there are provisions of the code which directly conflict with existing laws governing certain sectors, which FRCN has included all in a bid to elevate itself to another super regulator over and above existing sectorial regulators for some companies.
The shareholders pressure group stressed that FRC should and must provide leadership in the nation’s corporate world by constituting its board in line with its new corporate governance code.
Other grey arrear, he said, is the provision in the code which allows executive directors of the companies to be appointed board members of another company or companies.
They also contested the time frame provided or “cool off period” before former executive director is appointed chairman of the same company he served and the engagement of two auditing firms.
The group argued that contrary to the views espoused by government through the FRC, the appointment of substantive executive directors into board(S) of other companies breached the whole essence of internationally accepted corporate governance and best practices.
The group argued that the prescribed 10 years “cool off period” before former CEOs assume the position of chairman in the same company amounts to serious setback in utilisation of limited experts, managerial proficiencies and scarce human capital resources.