The new Code of Corporate Governance for the telecoms sector is targeted at separating the roles of the chairman from that of the Chief Operating Officer (CEO) of all licensed telecommunications company, the Nigerian Communications Commission (NCC), the industry regulator has said.
Making the disclosure shortly after it presented a guideline for the planned mandatory code of corporate governance to telecoms operators in Lagos recently, the Commission’s Secretary, Felix Adeoye, expressed the displeasure of NCC over the activities of most telecoms operators, where their chairmen also assume the position of the CEOs of the company. According to Adeoye, such situation always leave room for excessive and undue control by the same person who doubles as chairman and CEO.
NCC had in 2014, introduced the voluntary code of corporate governance for the telecoms sector. Two years after it was introduced, NCC felt the need to review the code, with the aim of making its compliance mandatory for all licensed telecoms operators, with a strong desire to separate the roles of chairman from the CEO.
“While compliance with the provisions of the industry code was initially made voluntary for a period of one year, which has since elapsed, the Commission is gradually moving towards a regime of stricter compliance, where the roles of chairman and CEO will be clearly spelt out to avoid conflict of interests,” Adeoye said.
According to him, telecoms business operation requires extensive capital investment and commensurate mental capacity to cope with the dynamism of the industry. “Typically investors are comfortable with a predictable policy and regulatory regime, which allows their investments to thrive with less interventions,” he said.
He, however, added that most telecoms operators have separated the roles of their chairman from those of CEO, but explained that some of the operators, especially the smaller operators, were yet to separate roles.
This, he said, portends great danger for the organisational structure and growth because of personal influence that may play up in the course of the business.
Adeoye said when the planned mandatory code would become effective, it would help to strengthen organisations and not to stifle their operations as widely envisaged by most telecoms operators.
Another area, which the code is also targeting, according to Adeoye, is passive board members of telecoms organisations, where such passive board members meet once in a year, thus making it difficult for the board members to discharge its primary oversight duties.
“It must be clearly stated that the board of any organisation occupies a strategic position in the affairs of the company and as the policy drivers of the company, it has the responsibility of ensuring compliance with the provisions of the code,” Adeoye said.
Under the planned mandatory code, there will be consequences for breaches, especially in the areas of board representative and the performing of dual functions by a single staff. While he said there would also be sanctions, Adeoye stressed that emphasis would not be on sanctions, but in entrenching an abiding culture of good corporate governance practices that will sustain the industry beyond the present generation.