The Financial Reporting Council (FRC) has unveiled the draft of the Nigerian Code of Corporate Governance (NCCG) 2018, the outcome of a 15-member committee set up in January to review the October 2016 suspended National Code.
Unlike the suspended 2016 code, the new code covers all public companies, private companies that are holding companies of public companies, concessioned and/or privatised companies as well as regulated private companies whose files return to any other regulatory authority other than the Federal Inland Revenue Services and the Corporate Affairs Commission. The not-for-profit code remains suspended.
Speaking at an event in Lagos on Wednesday, Daniel Asapokhai, the executive secretary of FRC said the proposed code contains 28 principles as the core of the code and 230 practices which are recommended to enable flexibles in different regulators and companies implementing the principles.
"This is perhaps the distinct shift between the current code and the previous version of the code released, which was suspended. That is the outcome of the work the council (FRC) has taken," Mr Asapokhai said.
"The time we have spent between the suspension of the earlier code released in 2016 and today has also allowed us to take cognizance in corporate governance practices around the world."
According to him, the proposed code will increase national competitiveness and is more in line with what most countries have taken in terms of the corporate governance especially the UK corporate governance code and the King IV Code of Corporate Governance for South Africa, 2016, whose chairman was invited to Nigeria to advise the team in charge of the review of the suspended code.
"Nigeria, as an economic entity, competes with other countries for investment capital; and investors will be attracted to where international standard and codes are observed. So it is therefore important we benchmark ourselves with internationally agreed standards and goals, investors can clearly see how well we are," said Mr. Asapokhai
"We believe having a national code that a lot of our commercial enterprises adhere to, will increase national development."
The code aims to standardise the practice of good corporate governance and induce voluntary compliance with the highest ethical standards across the Nigerian market.
Due to the fact that many companies that are expected to implement the code may not currently have adequate corporate governance structures, companies would be required to begin reporting on the application of the Code in their annual report, starting in financial years ending on or before January 1, 2020.
The FRC said it would embark on public awareness campaign across the geopolitical zones for a widespread acceptance of the draft.
"The council will organise public hearing in all geopolitical zones, including the Federal Capital Territory, to elicit comment and reactions from key stakeholders which will be taken into consideration in finalising the Code," said Nelson Anumaka, head, directorate of corporate governance, FRC.