Financial Reporting Council commits to standardising corporate governance practices

by | January 25, 2018 12:11 am



The high standards of corporate governance and financial reporting practices, which the Financial Reporting Council of Nigeria (FRC) was set up by law to promote and enforce, are geared ultimately towards encouraging and increasing trade and investment in Nigeria.

It is only logical that Nigeria introduces and adopts rules and regulations that strengthen the operating environment, create a more enabling and supportive environment for investment and protect the interest of investors while promoting the ease of doing business in nation and making the country a more attractive destination for industry, trade and investment.

Recall that on October 17, 2016, a National Code of Corporate Governance was issued by the Financial Reporting Council, but was suspended by the Federal Government on October 28, 2016 following widespread expression of concerns and reservations by a cross section of the business and non-for-profit community. That code was comprised of separate codes for large, formal corporates, Non-Governmental Organisations (NGOs) and not-for-profit organisations and the public sector. The one that drew the more vociferous and strident reaction was the code for the NGO and non-profit sector.

On January 9, 2017, the Federal Government appointed a new leadership for the FRC while the Minister for Investment, Trade and Industry, Okechukwu Enalema inaugurated a new board for the FRC in May 2017.

The Board which has been working over the past several months taking stocks and developing a new strategic direction also has a plan which clarifies and resets a new direction and operating style for the FRC and articulates the areas of focus and priority for the Council over the next 3-5 years.

The identified strategic priorities of the FRC in the near term include: review and reissuance of the National Code of Corporate Governance; Conducting a post-implementation review of International Financial Reporting Standards (IFRS) adoption in Nigeria; introducing IFRS-lite for the Small and Medium Enterprise (SME) sector; working with other regulators and agencies of government to introduce a uniform government-wide financial reporting system; and improving of financial reporting and standards of corporate governance practices in the public sector, including the issuance of International Public Sector Accounting Standards (IPSAS), the public sector equivalent of IFRS and a Code of Corporate Governance for the Public Sector.

Last Thursday January 18, 2018, the Financial Reporting Council board inaugurated a Technical Committee for review of the suspended National Code of Corporate Governance.

The Committee, which was inaugurated by the chairman, governing board of FRC, Adedotun Sulaiman, has Muhammad K. Ahmad as its chairman.  Ahmad is a seasoned public sector executive with over 35 years of distinguished experience.

He served as the pioneer Director-General and Chief Executive Officer of the National Pension Commission (PenCom) and oversaw the growth of the pension industry in Nigeria from ground zero to an asset base of N4.7trillion under management.

The inauguration of a Technical Committee for review of the suspended National Code of Corporate Governance is an important step towards realisation of one of the high-priority objectives of the FRC.

The objectives of the committee are to: review the suspended National Code of Corporate Governance, taking into cognizance the extensive public commentary received on the suspended Codes; develop/recommend the revised Code(s); and carry out all such activities as are necessary to give effect to the foregoing objectives.

The FRC assembled distinguished panel of experts, knowledgeable and experienced Nigerians to assist the Council with this important national assignment. The technical committee members who are experienced professionals, academics and practitioners offered themselves for the challenge of introducing a credible and widely accepted National Code of Corporate Governance.

Other members of the committee are Bennedikter China Molokwu, a fellow and past president of the Institute of Directors (IoD); Sirajuddin Kofo Abdusalam-Alada, deputy director, legal, Central Bank of Nigeria (CBN); Fabian Ajogwu, a Senior Advocate of Nigeria and Lagos Business School professor of Corporate Governance; Garba Abubakar, director, compliance and special adviser to the registrar-general, Corporate Affairs Commission (CAC); and Tomi Adepoju, a partner with KPMG Nigeria and head of governance, risk and compliance services.

The sixteen-man technical committee also include: Tijjani Borodo, a legal practitioner; Godstime Iwenekhai, head, listings regulation department, Nigerian Stock Exchange (NSE); Abdulrahman Mohammad Saleem, assistant general manager at the National Pension Commission (PenCom); Tola Omotola, executive director, Guaranty Trust Bank Plc; Nat Ofo, a professor of the department of Business Law, College of Law, Igbinedion University Okada; and Chris Ogbechie, professor of strategic management at Lagos Business School (LBS) where he teaches strategy, sustainability and corporate governance

Other members are: Tarfar Makyur, Financial Standards and Corporate Governance, Securities and Exchange Commission (SEC); Uto Ukpana, Company Secretary, MTN Nigeria Communications Limited; Nicholas Okpara, former director, supervision, National Insurance Commission (NAICOM); Tinuade Awe, Executive Director, Regulation, Nigerian Stock Exchange and chairman, FRC board committee on corporate governance; and Nelson M. Anumaka, deputy director, corporate governance, FRC.    

Sulaiman said: “While the absence of a National Code of Corporate Governance provided the vacuum which industry regulators sought to fill within their respective spheres of regulatory purview, we will use the introduction of a revised national code to provide a fulcrum around which different industry or sector regulators can align their efforts to introduce, promote and entrench high standards of corporate governance practices in their respective sectors.”

Daniel Asapokhai, Executive Secretary/CEO, FRC, said that the diversity of membership of the Technical Committee for review of the suspended National Code of Corporate Governance reflects the FRC commitment to working with all stakeholders on the journey to a new National Code of Corporate Governance. 

His words to the technical committee members: “I am sure you would do a great job for our country and help us address the procedural and substantive concerns that culminated in the suspension of the earlier released Code that was released in 2016. You have been chosen for your expertise in the subject matter and not merely as nominees of your respective organisations. I am also particularly pleased to welcome the very well-respected MK Ahmad, who has agreed to chair the Technical Committee.”

Asapokhai acknowledged the many institutions including the International Finance Corporation (IFC) and others that have pledged support for the work of the Committee. FRC looks forward to even more stakeholder organisations rising to support this effort.

Iheanyi Nwachukwu