Stakeholders seek investment friendly unified NCCG to boost FDI

PARTICIPANTS at the one-day public hearing on the National Code of Corporate Governance (NCCG) have urged Financial Reporting Council of Nigeria (FRCN) to put into considerations the salient points raised by the various stakeholders in the financial system in order to produce a unified code that would boost Foreign Direct Investment (FDI) and attract voluntary compliance.

Speaking at the forum in Lagos on Tuesday, the stakeholders, who admitted that there was a need to establish a unified NCGC however, submitted that the code should not be made mandatory for all sectors and companies operating in the country.

This, according to them is due to the fact that companies operating in Nigeria differ in terms of sizes and capacity.

Specifically, a representative from the Central Bank of Nigeria, Oseratin Oyewumi argued that a lot of work needed to be done before the code would  become operational. 

She explained that NCCG should work out modalities that would attract people to hook on to be the code voluntarily in order to achieve the expected result.

She pointed out that South Africa has a unified code of corporate governance, adding that it was not restrictive in nature.

Similarly, the National Coordinator, Independent Shareholders Association of Nigeria, Sir Sunny Nwosu explained that the FRCN should organize a road show to educate stakeholders on the relevance of the code to the nation’s growth.

“The opinion flowing from stakeholders should not be totally ignored but the councils should look into these issues and where it contradicts with the proposal, they had to find a middle way to ameliorate such issues because there are so many issues that can be expunge from it which would be detrimental to good corporate governance.

“As we are moving, issues are being raised and corrections are being made. The council need to go back and look at all the reports raised which they have taken and match it over with exposure document and know areas that needed to be expunged. Opinions that is very strong have to be respected,” he advised.

Commenting on the FRCN’s exposure draft of NCCG, PricewaterhouseCoopers (PwCs) said that compliance should be voluntary, stressing that the approach of the United Kingdom FRC, which plays a regulatory role similar to the FRCN, was based on facilitation rather than dictation.

According to the firm, the approach was codified in a public document and builds on the facts that market participants and professionals advisers, encouraged by the investor community, have the primary responsibility for achieving high standards of governance and reporting.                                      
The company however said that the board composition of a minimum of eight with executives, non executives and independent non executives would be overly onerous on many smaller companies and unreflective of the business environment of Nigeria.