NSE Introduces Corporate Governance Index, Honours 35 Firms
The Nigerian Stock Exchange has launched the Corporate Governance Index (CGI) that will track the performance of the 35 Corporate Governance Rating System (CGRS) rated companies using their market capitalisation, free float and corporate governance rating scores.
The announcement of the CGI launch was made at the certification ceremony for for 35 companies and 437 directors that made it over the 70 per cent threshold for the CGRS process in Lagos on Thursday.
According to the NSE, the index will be reviewed on a bi-annual basis at which point other companies that have become CGRS rated in the interim may be added to the Index or companies that have had their ratings suspended or withdrawn may be removed.
The exchange said the index is expected to be an important tool for investors keen on investing in well governed companies as well as corporates eager to distinguish themselves on the ground of governance.
Specifically, the Chief Executive Officer of the NSE, Oscar Onyema, said: â€œThe launch of the CGI is an important milestone to strengthening listed companies by tracking their corporate governance practices. This index will increase transparency in our market and provide investors additional data points upon which to make sound decisions. I congratulate the companies that have successfully completed the process and I expect that they will be more positively looked at whilst trying to raise and access capital within or outside of our jurisdiction.â€
Meanwhile, speaking on the certification ceremony, Co-Founder and Chief Executive Officer, CBi, Soji Apampa, said: â€œThis is a triumph for collective action in the fight against corruption and unethical practices. I congratulate the companies and directors being honoured today and I urge them not to relent in their efforts to sustain the high level of corporate governance that has brought them thus far. Todayâ€™s celebration is not a destination but a continuous process that should be consistently maintained and further improved upon. I encourage other listed companies still on this evolutionary process to keep at it and conclude the process during this new review period which is now open.â€
The CGRS was launched on November 3, 2014 after a successful pilot phase involving a number of companies listed on the NSE some of which are now listed on the Premium Board. The CGRS was designed to rate companies that are listed on the NSE based on their corporate governance and anti-corruption culture. The process comprises three segments: an independently verified, self-assessment by the company; a certification of director awareness of their fiduciary duties; and, a corporate integrity assessment where feedback on actual company behaviour is sought from internal and external stakeholders.