Nigeria Employers’ Consultative Association (NECA) has once again reiterated that while it is not against regulations on Code of Corporate Governance, it is however important for the process of finalising the document on such an important issue to be transparent and inclusive of perspectives from the stakeholders. Unfortunately, the Financial Reporting Council has not taken due cognisance of those factors before making Public the Code it recently
released, which has since been suspended by the government. In a release, Mr. O. A. Oshinowo, Director-General of NECA asserted that: “several provisions of the suspended Code that are inimical to business needed to be tinkered with. Such aspects include section 19 on requirement for Joint Auditors, which compelled any company with a turnover of N10 billion or market capitalisation of N1 billion to mandatorily appoint two external audit firms.” He surmised that Organised business finds it difficult to connect with this “avoidable cost to companies which does not have any tangible value” and recommended that the requirement should be optional for companies.
Mr. Oshinowo pointed out another sore provision in the code: “the requirement for every Board to have a minimum number of three (3) categories of directors Independent Non-Executive Directors (INEDs), Non-Executive Directors (NEDs) and Executive Directors (EDs))” This, in his opinion, “would lead to a needless mandatory reconstitution of a Board” He advised that the Board of each company should be allowed to have a mix of directors as it deemed fit. In the same vein, the current sensible provision in the SEC Code that majority of the directors should be non-executive with at least one Independent Non-Executive Director should be incorporated in the FRC Code to replace the existing provisions.
While assuring Government on the readiness and willingness of the Organised Private Sector (OPS) to work with Government on the review of the Code, Mr. Oshinowo re-affirmed that the OPS will always respect and stand on the side of principles and rules of law in the Country.