Vice President Yemi Osinbajo on Tuesday launched the National Code of Corporate Governance 2018, saying that its implementation will promote economic growth, lower cost of capital, minimise wastage and tackle corruption.
He said the policy further underscored the importance which the current administration attached to ensuring the sustainability of businesses operating in the country.
Expressing satisfaction over its eventual launch, he said the achievement further aligned the President Muhammadu Buhari-led administration with its signature ease-of-doing- business agenda- and urged business leaders to show enthusiasm towards its implementation.
Speaking at the unveiling ceremony in Abuja, the vice president said with its introduction, the country has taken a giant stride in its bid to becoming a preferred investment destination.
He said the unveiling of the corporate governance code was not just a symbolic practice but a development which would help to sanitise the business environment and unleash internationally accepted best practice standards for business conduct in the country.
Osinbajo added that the implementation of the code would be enjoyed by investors, the entities applying the code as well as benefit the economy.
He further expressed hope that given the constant flow of talents from the corporate world to the political space and vis-versa, a similar code could be developed to stipulate higher standards of governance practices in the political landscape over time.
He said: “I really do hope that this code of corporate governance, I wish we could extend it also to political players, at least it might help a bit in stemming defections and counter defections.”
However, Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, said the country can now boast of a national corporate governance code which harmonises different sectors of the economy.
He noted that the recent global financial crisis had exposed significant shortcomings in the corporate governance of companies, leading to monumental failures in risk management, a spate of accounting scandals and outright fraud.
According to the minister, good corporate governance, developed by the Financial Reporting Council of Nigeria (FRCN) will instil investor confidence and instigate rapid growth in corporate markets- noting that the investment decisions taken by the local and international investors are stimulated by good governance practices.
He said Nigerian companies needed to adhere to good corporate governance practices and standards to gain the competitive edge required to survive in competitive and dynamic markets as well as attractive the much-desired Foreign Direct Investment (FDI).
Enelamah, however, stressed that the code was not static but subject to periodic amendments.
He said: “The principles can differ according to economic circumstances of the countries, development levels and legal systems. Therefore, there would be the need to revise the Nigerian Code of Corporate Governance 2018 from time to time.”
He called on economic participants, not just regulators- to promote and enforce the code in order to reap its benefits.
The minister added that the issuance of the 54-page document would foster the achievements of government’s initiative of enhancing the ease of doing business, thus paving the way for new opportunities and growth of capital market.
There had been a failed attempt to introduce a national code of corporate governance for the country in 2016 but was suspended barely after it was announced following widespread criticisms which led to the sack of former Executive Secretary of FRCN, Mr. Jim Obazee.
Nevertheless, Chairman, FRCN, Mr. Adedotun Sulaiman said the suspension of the previous code led to “our having to go back to the drawing board. We have fully leveraged the lessons learnt for the current effort and this was reflected in the extensive consultation and engagement with stakeholders.”
Executive Secretary/Chief Executive, FRCN, Mr. Daniel Asapokhai said the code focuses on corporate organisations where 70 per cent economic value is generated.
He said the document has no sector specification but scalable to other entities nevertheless.
He said a similar code will soon be forged for the public and non for profit sectors, stressing that it’s objective was to promote of trade and investment as well as boost commerce.
He said FRCN would not be interested in how much fines it’s able to generate but rather, how successful Nigerian corporates become following the implementation of the code.
He said the objective was to rewrite the diverse sector codes into a national language in term of standard and practices which now become guidelines for corporates.
Asapokhai said the code will stand on its own but instruments will attach to organisations
The code, among other things, specifies the role of the board and its officers, appointment to a board, risk management principles, relationship with shareholders, business conduct and ethics, transparency and sustainability.