IoD Centre for Corporate Governance (IoDCCG) is a collaborative project of three partners namely: Institute of Directors Nigeria (IoDN), the Securities & Exchange Commission (SEC), the regulatory authority for the Nigerian Capital Markets and the Corporate Affairs Commission (CAC), the sole agency of government responsible for registration of companies in Nigeria.



IoD Centre for Corporate Governance (IoDCCG) is committed to improving and promoting good corporate governance principles, standards and practices in Nigeria through advocacy, research, high quality trainings and Corporate Governance consulting.



The Centre is at the forefront of advocating for the application of good governance principles by private and public organisations, thereby contributing to, and advancing best and leading practices in Nigeria.


IoDCCG is an Affiliate Member of the African Corporate Governance Network (ACGN) and is in collaboration with Centre for International Private Enterprise, (CIPE) Washington, USA.



Essentially, the Centre provides amongst other things; High-quality Corporate Governance research and publications, Corporate Governance training workshops, Seminars and Conferences as well as Advocacy and public enlightenment on Corporate Governance, and Anti-Corruption and Ethical Compliance.



Moreover, it also handles Corporate Governance support services to public and private sector organisations, including design and development of Corporate Governance framework, Board Induction, Board & Committees Charters and policies as well as Board and Corporate Governance Evaluations, Collaborations and Alliances for promotion and acculturation of good Corporate Governance, Support on the institutionalization of global leading practices in Corporate Governance and Support to organisations in designing Anti-Corruption & Ethics Compliance Systems as well as free membership of Ethics, Shuaibu Idris mni FIoD Chairman, Board of Governors  IoD Centre for Corporate Governance, sent to us this an Questions and answers.



What are the benefits of being a member of the IoD Nigeria?




IoD Nigeria Members benefit from a wide range of services offered by IoD globally, including but not limited to the following: Creation of unparalleled network amongst business leaders, Upgrading the conceptual and professional skills of Directors, Representing Business to Government, Capacity Development through Conferences and Workshops, Meeting point of both foreign and local investors, Business Information Service and Special discount at premium hotels & lounges all over the country and beyond to mention but a few.



What are the requisite qualifications for an individual to become a director?




The Companies and Allied Matters Act CAMA 2020 as amended provided in its Section 244 (i) – “Directors are persons duly appointed to direct and manage the affairs of a Company”. The Nigeria Code of Corporate Governance 2018 recognise a Director, as a member of the Board which is responsible for providing entrepreneurial and strategic leadership as well as promoting ethical culture and responsible corporate citizenship.



The major requisite qualifications for an individual to become a Director as provided in the relevant statues are namely; A person:  Must not be an insolvent, bankrupt or fraudulent persons – CAMA 2020, S. 279, Must not be under 18 years old; and must be a persons of sound mind, Must not be 70 years old and above in the case of a Plc and person with Appropriate skills and diverse knowledge for discharge of duties and responsibilities are very essential.




What’s your view about Corporate Governance in Nigeria?




Corporate governance has become a burning issue all over the world. It became most pronounced in the United States especially after the collapse of two corporate giants- Enron from the energy/power sector and WorldCom from the communication sector in 2001 and 2002 respectively. In addition, one of the world’s top five accounting firms –Arthur Andersen and Co, collapsed under the corporate scandal generated in Enron saga.



The first major effort to address this issue in Nigeria was in 2003 after the United States had enacted their Sarbanes-Oxley Act 2002, with the setting up of the Atedo Peterside Committee by the Securities and Exchange Commission (SEC). This Committee could not do much as the implementation of the provisions of its Code were made voluntary and not accompanied by any sanctions. We later had several Codes like the Securities and Exchange Commission (SEC Code 2006) of Corporate Governance, Central Bank of Nigeria (CBN) Code of Corporate Governance (2006), National Insurance Commission (NAICOM) Code of Corporate Governance to mention but a few.




The Financial Reporting Council (FRC) of Nigeria introduced a unified code – National Code of Corporate Governance (NCCG) in October 2016. This Code was suspended almost immediately after it was issued due to unending controversies arising from opposition to some of the provisions of the Code.  Although the Codes have most of the elements and basic principles of good Corporate Governance, there exist gaps between implementation, compliance and sanctions as widely reported. For the records and in order readers may need to have few tips on the Code, let me attempt to provide synopsis of the Codes.




The NCCG 2018



On the 15th of January 2019, the Federal Government of Nigeria unveiled the Nigerian Code of Corporate Governance 2018 (Code), which is aimed at institutionalizing best practices in corporate governance in Nigeria in order to restore confidence in the Nigerian economy and create an environment for sustainable business operations.




The Code provides a framework “to ensure good corporate governance practices in the public and private sectors of the Nigerian economy….” by articulating a broad set of principles on corporate accountability, transparency and sustainability for both public and private companies in Nigeria.




In other words, there was no uniform corporate governance standard for all companies and across all business sectors, and the companies were made subject to the codes of corporate governance applicable to the sectors in which they operate, thereby making some companies subject to more than one corporate governance regime.


However, the Code, recognizing the importance of flexibility and scalability to the implementation of such cross- sectoral and non-company-size-specific Code of its nature, applies a principle-based approach to specifying the minimum corporate governance expectations placed on companies.



Although the Code does not void sector specific codes which are now guidelines regulating the operations of each of the sectors. For effectiveness, the Financial Reporting Council of Nigeria (FRC) has the mandate to monitor the implementation of the Code and is empowered to issue guidelines towards the implementation of the Code by the sectoral regulators.


Deep Dive into NCCG 2018



There are twenty-eight (28) broad principles laid down by the Code, sixteen (16) of which relate to the Board of Directors and Officers of the Board (addressing diverse board related issues including composition, key functions, meeting, induction, delegation of duties, and evaluation); 4 concerning risk management, whistle blowing and audit processes (together titled Assurance); 3 on relationship with shareholders (reiterating the importance of general meetings, communication with and equitable treatment of shareholders); 2 on ethical conduct of business (which extol establishment of policies and mechanisms for monitoring insider trading, related party transactions, conflict of interest and other corrupt activities); 1 on sustainability (pushing for the adoption of environmental and socially sustainable business practices), and 2 on transparency (addressing stakeholders communication and disclosure of material information).



To avoid robotic implementation of the Code and ensure that companies do not lose sight of the goal of the governance principles, the Code requires, in certain circumstances, that companies adopt the “Apply and Explain” principle, which requires that companies not only apply the governance principles, but also explain how their specific conducts fulfil the objectives of the governance principles. However, companies are at liberty to tailor suggested practices under the code to meet specific industry or company needs. In other words, strict adherence to the principles of corporate governance stipulated under the Code takes precedence over practices suggested under the Code for compliance with the principles.



While it may be too soon to evaluate the impact of the Code in the Nigerian corporate space, there is no gainsaying the fact that there will be need for considerable readjustment, especially for those companies that have very low or zero corporate governance practices. Reporting has commenced and organisations are expected to comply in each Financial Year with the provisions of the Code based on its philosophy to avoid sanctions.



As the new helmsman in charge of the Centre, what new things do you hope to bring into the practice of Corporate Governance in Nigeria?




While previous Boards have made significance contributions towards the advancement of Corporate Governance practices in Nigeria. The current Board of Governors under my leadership will work towards strengthening the existing system and also focus in key specific areas, such as; Closer partnership and collaboration with the founding partners of the Centre in the execution of its major activities, The Centre will be upscaling its services and increasing internal capacity to man new areas and expand the scope and frequency of conferences, seminars and workshops as well as research offerings and other advisory services that we render to clients.



New service offerings such as the Management of Whistle Blowing Mechanism and Anti-Money Laundering training would be introduced. In addition, The Centre will take its prime position in moving Nigeria economy forward through the acculturation of Corporate Governance practices, principles and values in key Government Ministries, Agencies and Departments (MDAs) as well as key sectoral groups in private organisations.


Constant engagements through courtesy visits and the introduction of Annual National Corporate Governance Submit will be part of the tools for the achievement of these objective.




I understand that a Director can also become the Secretary of a Company. Can you expatiate on this, sir?



Subject to the provisions of the Companies and Allied Matters Act 2004 (CAMA), a private limited liability Company may appoint any competent person as its Secretary. The act ie CAMA does not exclude a Director of a company to hold such a position as he/she is eligible to serve as Company Secretary.



Consequently, a private company may appoint one of its Directors as a Company Secretary since every person eligible for a position of Director of a private company under CAMA are also eligible or qualified to hold position of Company Secretary.




However, it is important to take note that although foreigners are qualified to be appointed as Directors of any Company in Nigeria, a foreigner cannot serve as a Secretary of any Company in Nigeria.



Is it possible for an individual to solely run a Company as Director?



Going by the amended Companies and Allied Matters Act 1990 now CAMA 2020, a single person can start, promote, register and own a private company. The implication of this is that such person will be the sole Shareholder and Director of his/her private Company. Before now, a Company must have at least 2 persons as Shareholders and Directors to be able to form and manage a Company.



This change is believed to positively improve the ease of doing business in Nigeria and also support the economic growth with new businesses. Hopefully, it will move up Nigeria’s ranks 131 out of 190 countries on the World Bank Doing Business Index.



Is there a ceiling on the age an individual can become a Director? Can a minor be appointed Director?



According to laws of Nigeria and specifically CAMA 2020 as amended, a minor is said to be anyone below the age of 18 years. He or she cannot vote or be voted for, same thing applies to criminal liability. Hence, a minor CANNOT (note the emphasis) be a Director of a Company in Nigeria. However, it is worthy of note that a minor can be a Shareholder of a Company. Also, a Director may not be 70 years old and above in the case of a Plc.



What is your assessment of the 2021 budget and the proposed 2022 budget of the Federal Government?

In the review of the performance of 2021 Federal Budget, the link between revenue and expenditure stood out as a huge challenge. In the 2021 Second Quarter and Half Year Budget Implementation Report, Nigeria recorded a fiscal deficit of N3.48 trillion in the first half of 2021.



This was N1.03trillion (42.46 percent) above the projected half-year deficit of N2.44 trillion.



It was also, above the N2.80 trillion deficit that was recorded in the first half of 2020.



Nigeria spent N2.02 trillion to service matured debt despite weak revenue recorded. This means that a significant percentage of Nigeria’s budget was financed using borrowed funds. Despite this, the federal government has continued to defend its borrowing plan, noting that it is necessary for the country’s infrastructure development.



The federal government has again revealed that a significant portion of its revenue in the first six months of 2021 went into paying for matured debt. N2.31 trillion in the first half of the year was released for budget implementation, with N2.02 trillion of that amounts going to debt servicing. This means that for every N100 issued by the federal government to finance the budget, N88 was spent on debt repayment, forcing the government to rely significantly on borrowed funds to pay workers and other expenses.




The implication of the foregoing is that Nigeria is facing a revenue crisis and if it is a private sector concern, it would have been due for a bailout. A situation where debt service takes more than 88% of revenue cannot be a sign of sustainability.  It is a clear sign of major issues requiring urgent attention. Borrowing money to pay Salaries as in the extant case is against the provisions of the Fiscal Responsibility Act 2007.




The 2022 budget has a deficit of about N6.25tn, approximately 3.39% of GDP which is approximately a 2% decrease when compared to the 2021 budget which its deficit component was about N6.44tn. Key concerns is rising debt profile, increased debt service to revenue ratio and foreign exchange instability which has been exacerbated by the COVID-19 pandemic.



Although, it’s quite commendable as the federal government has continued to emphasized internal generation of revenue and investment in capital infrastructure. However, the federal government need to focus on diversifying export revenue sources away from crude oil, which currently accounts for more than 80% of total foreign exchange receipt.



In addition, the federal government need to reconsider its spending on petroleum subsidy to either consider a total removal to ensure that it is targeted only at the most vulnerable Nigerians or develop effective strategies that would reduce spending.


The federal government need to address insecurity in order to boost domestic investment and attract foreign direct investments.



What implications do you think the 2021 budget has had on Corporate Governance in the country?




The size of the 2021 budget was constrained due to relatively low revenues and high debt service obligations.



In the 2021 Half Year Budget Implementation Report, Nigeria recorded a fiscal deficit of N3.48 trillion in the first half of 2021. This was N1.03trillion (42.46 percent) above the projected half-year deficit of N2.44 trillion. It was also, above the N2.80 trillion deficit that was recorded in the first half of 2020.



This shows a poor performance of the 2021 Budget in the first six months. Critical sectors of the economy have had serious budget cuts due to huge debt servicing.



The non-transparent fuel subsidy financing has not abated raising fears on the allocation processes.



The role of budgeting in promoting Corporate Governance is critical in the allocation and management of funds to meet well defined objectives. The nation’s current budgeting system and its implementation raises serious questions on the promotion of accountability and transparency in funds appropriation.



The Nigerian Code of Corporate Governance 2018 (Code), is aimed at institutionalizing best practices in corporate governance in Nigeria in order to restore confidence in the Nigerian economy and create an environment for sustainable business operations.


The Code provides a framework “to ensure good Corporate Governance practices in the public and private sectors of the Nigerian economy. The implication of Corporate Governance on the 2021 budget clearly shows a breach in the outlined principles and practices which could lead to systemic failure and liquidation in the case of an organisation.




How does the IoD Corporate Governance Centre see the business environment in Nigeria?




With the discovery and administration of COVID-19 vaccines as well as easing off of lockdowns, available data and forecasts on key macroeconomic variables suggest optimism in output growth. Crude oil prices are rising while inflation is slowing down although the pressure on the naira is not receding.



Massive administration of vaccines to citizens and strict adherence to rules of engagement as espoused by Health Authorities together help to prevent further spread of COVID 19 and the attendant consequences.



These gives us hope and optimism for better years ahead and provides opportunities for the Centre to add value to both the public and private sectors organisations and individuals through innovative Corporate Governance training programmes, seminars and workshops. We will ensure the Centre is shining example by inculcating the values of Corporate Governance, Ethics, Transparency and Integrity into Corporate Culture in our country thereby contributing to extending this standard to the fabric of every part of the Nigerian community and its leadership.



Nigeria with a population in excess of 200 million people and mostly young, is a destination of choice that can not, should not and must not be evaded or avoided by investors both local and foreign. Google is about investing 1 billion US dollars in Africa with Nigeria getting the lion share! Can google be wrong?



What is the Centre doing to better the business climate in Nigeria?




The Centre is upscaling its capacity to increase its service offerings aimed at improving and promoting good Corporate Governance principles, standards and practices in Nigeria through advocacy, research, high quality trainings and Corporate Governance consulting mandates.


The Centre will continue to be at the forefront in the advocacy for the implementation of good governance principles by private and public organisations, thereby contributing to, and advancing best and leading practices in Nigeria.



Additionally, and specifically, the Centre is collaborating with the Centre for International Private Enterprise, (CIPE) Washington, USA, to conduct Ethics 1st Trainings among other compliance activities. Ethics 1st is a Database of Sustainable, Low-Risk Small and Growing Businesses & Suppliers in Africa with Enhanced Compliance Culture. The platform offers a demand driven solution to market opportunities and challenges, which Nigeria businesses can take advantage of and launch into the global business competitiveness space. As an ethical and compliance readiness venture, funding and other business growth interventions becomes easy to attract.



It is believed that a lot of corrupt and underhand practices are being perpetrated by corporate organisations in the country. What is your institute’s plan to tackle this problem?




Indeed, corruption has eaten extremely deep in to the fabric of our society. The question you asked is an excellent one as there is need to bring out the issue of corruption from all our facets of endeavours and not just the politicians and or civil servants. The organised private sector also has its share of corrupt practices perpetrated by a few misguided and disgruntled people. Issues such as low-quality products, weight and measurement issues, health, safety and environment issues, unfair, unjust and immoral labour practices, etc are amongst the many vices perpetrated by companies. Stealing, theft and other acts of misappropriation or malfeasance are common in Corporate Nigeria.




IoDCCG believes that with quality leadership in an organisation coupled with astute Board that is replete with experienced technocrats, culture of accountability, transparency and sustainability would be established, nurtured and sustained in the private sector thereby appropriately and adequately managing the issues through a robust Corporate Governance practice. If and where men and women of honour and integrity are appointed to serve on the Board of a company, establishment of rule of law and strict adherence to regulations, codes and morals becomes the norm. Herein lies the wisdom of what we do and what we preach to all segments of the society. Its our firm belief that with such culture in place, the challenges manipulations of the system, tax evasion and avoidance, substandard goods, inappropriate measurement etc would be reduced, minimised and possibly eliminated from our system and or society over time.

Thank you.


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