FRC Highlights Benefits of National Corporate Governance Code

Ugo Aliogo
The Chief Executive Officer, Financial Reporting Council of Nigeria (FRCN), Mr. Daniel Asapokhai, has stated that there would be great benefits for stakeholders who comply and achieve standards set in the new National Code of Corporate Governance (NCCG).

Asapokhai, disclosed this recently in Lagos at the Institute of Directors (IoD) new members’ induction with the theme: “The New National Code of Corporate Governance- a Framework for Good Practice,” that took place in Lagos.
He stated that in 2016, the code was suspended by government because of certain issues raised by stakeholders.

However, Asapokhai said the issues raised have been dealt with, saying the new code should therefore be acceptable by members of the public.
The FRC CEO explained that in the new code, the primary sanctions for people that fall short of the standards within the code would be market-based penalties.

Asapokhai remarked that stakeholders might fall short for different reasons and the market would reward those that comply the best, adding that there is a market based incentive system, “there will be greater benefit to those who comply the most and achieve the standard.”

According to him, “Therefore, there are market-based penalties and market-based incentives. To get to the level where a regulator will chase after a stakeholder with the big stick to impose a penalty, it will be that the stakeholder has done the wrong thing as against making an honest effort at meeting well defined standards.

“So people might fall short for different reasons and the market will reward those who comply the best. Therefore, there is a market-based incentive system. There will be greater benefit to those who comply the most and achieve the standard will have greater benefit from the market.
“The new code is targeted primarily at the private sector. In terms of the suspended code, it was released in three parts: the private, public and non-profit sector.

“In terms of the approach the board adopted, we decided to do a phased implementation, where we deal first with the private sector code which will cover about 80-90 per cent of the economic base of the country.
“ Therefore, when we are done with this, in the next couple of months we will look at the public and non-profit sector.”