- Each Disco to get two more directors
Ndubuisi Francis in Abuja
In a bid to strengthen the corporate governance strucrure of the 11 electricity distribution companies (Discos) in the country, the federal government is set to increase its representation on the boards of the companies by two directors.
Given its 40 per cent stake in the Discos, the main objective of the move is to ensure transparency in their operations as well as improved performance.
The Bureau of Public Enterprises (BPE) said in a statement issued by its Head, Public Communications, Amina Tukur Othman disclosed that the decision to increase government’s representation on the boards of the Discos was the fallout of a recent meeting of the shareholders summoned by the privatisation agency.
The statemeny said: “In furtherance of the move of the FGN to increase its representation on the Boards of the Discos, the BPE summoned a meeting of the shareholders of the Discos on 26th June 2019.
“The Bureau at the meeting reiterated the purpose of the reform and privatisation in the Nigerian power sector to address efficiency gaps and attract much needed private sector capital and management into the power sector.
“This reform was expected to transform the sector to meet the country’s electricity demand,” it added.
Part of the requirements for the stated reform is the entrenchment of a corporate governance structure, which provided for the Core Investor to have six) “A” Directors and the BPE, one “B” Director.
According to the statement, “this was done to minimize the representation of the federal government on the boards and to grant the Core Investors sufficient control of the management and operations of the Discos.”
“In view of the need to strengthen corporate governance of the companies, the FGN decided to increase its representation on the Boards by 2 (B Directors) given its 40% shareholding.
“The objective is to ensure transparency in their operations as well as improve their performance,” the statement said.
In his remarks at the meeting, the Director General, Mr. Alex Okoh stressed the point that the process has been on for a long while, adding that the delay in the implementation by the Discos was not acceptable to the federal government.
The statement noted that subsequently, all parties agreed to the proposal “as it is in good faith to strengthen corporate governance of the companies.”
The parties agreed that all the activities outlined during the discussions at the June 26 meeting, which would formalise the increase in federal government’s representation on the boards of the Discos would be concluded and implemented on or before
July 15, 2019.