Incessant collapse of insurance firms in Nigeria has been blamed on poor corporate governance practices.
Against this backdrop, operators of insurance sector have been charged to run their businesses in line with good corporate governance principles.
Corporate Governance expert and principal partner, Agokei and Co, Dr Nosike Agoke, who made the observation at the second edition of the insurance Directors’ conference held in Lagos recently, said poor corporate governance structure in every organisation has negative consequences. These include organisational failure, loss of jobs, jail term for directors among others.
He said this being the case, directors on the board of a corporate organisation such as insurance firm should put into consideration key issues like good succession plan for directors especially the Managing Director, Chairman, executive directors among others.
He noted that it may not be the best decision for the board of an Organisation to appoint the longest serving Director as the chairman of the board, adding that directors must maintain clean reports, ensure that structure and composition of various board committees are good as well as ensure the enthronement of a strong board capable of delivering good corporate governance code.
He also said it was the duty of the board to ensure that internal control system was reviewed from time to time.
Earlier, the Acting Commissioner for Insurance, Sunday Thomas, had said the low level of effectiveness of corporate governance oversights in the insurance sector had remained one of the major regulatory concerns to the National Insurance Commission (NAICOM).
He added that the failure of corporate governance in the year’s past, have played a prominent role in the death or distress of most corporate organisations the world over, Nigeria inclusive.
“Over the years, the Commission has made attempts at entrenching good corporate governance culture in the insurance sector. The development and issuance of Corporate Governance Code in 2009 and the Market conduct guidelines in 2014 are among efforts of the Commission in this direction.
“Let me state here for emphasis that the primary role of the board either in a private or public entity remains the oversight of management to ensure the corporate goals, vision, mission and values of the entity are strictly upheld at all time,” he posited.