Contrary to insinuations at certain quarters that the recently released National Code of Corporate Governance (NCCG) was in conflict with the Financial Reporting Council of Nigeria, FRC Act, the Council has said the issuance of the code was in line with its statutory mandate.
Speaking at the FRC’s 13th Annual Financial Summit and Dinner held in Lagos, the Chief Executive Officer of the Council, Mr. Jim Obazee, said the development and issuance of Corporate Governance Code for business operations in the country was not in conflict with but in accordance with the statutory mandate given to the Council by the act of parliament establishing it.
Obazee said the misconception surrounding the whole thing was largely due to the wordings of section 77 of the Act which defined “public interest entities” for the purposes of the application of the Act”.
He noted that the same section also defined “entity” to mean any person or body of persons, whether incorporated or unincorporated.
He added that the latter definition was necessary to protect the sanctity of several sections of the Act.
As against claims from some quarters that the NCCG was the cause of the current economic recession in the country, Obazee said the code has the capacity to build confidence that can assist the nation’s economy recuperative mechanism.
“The FRC’s job in this period is to ensure that we are able to promote confidence, to promote assurance, create an enabling environment whereby recuperative mechanism will begin to engage.”
According to him, the theme of this year’s summit, “National Code of Corporate Governance and new Audit Report: A paradigm Shift” cannot be more apt, especially at a time when some unspoken questions are yearning for answers.
He cleared the air on the belief that the NCCG was capable of impeding ease of doing business country stressing that corporate governance is a means whereby society can ensure that businesses are well governed, not only managed, to which investors and lenders , both domestic and foreign can safely and confidently commit their funds.
Highlighting the benefits of the code, Obazee said the NCCG would enhance Foreign Direct Investment (FDI) into the country, noting that investors are more likely to invest in any jurisdiction they know that they will be entitled to keep the reward thereafter.
He added that the nation’s economy would benefit extensively from the NCCG through its demand for enhanced transparency and accountability in financial reporting and mandatory codes.
He added the NCCG is set out to address three main issues of ownership concentration, corporate board concentration and audit market concentration, especially the interest of the minority shareholders.
The FRC boss maintained that the code of corporate governance for private sector was mandatory and that of the Not-For-Profit sector code is operated on “Comply or Justify non-compliance basis, while that of the public sector is yet to come into operation.