Effective quarter of 2016, two moderating codes of corporate governance for the private sector and Not-for-Profit organisations will come into force as the Financial Reporting Council of Nigeria (FRC) looks to standards to better the country’s business and investment terrains.
Currently, the various regulators in the economic sector have cirporate governance codes to regulate conduct in their respective industries.
Those with subsisting code of corporate governance are the Central Bank of Nigeria, Securities and Exchange Commission, National Pension Commission, Nigerian Deposit Insurance Commission, National Insurance Commission and Nigerian Communication Commission.
These new codes which will harmonise all the existing and scattered operational industry codes of corporate governance and will come into force ahead of that of the public sector which requires comprehensive deliberations and approval by the Federal Executive Council.
Obazee at the 12th annual corporate financial reporting summit, in Lagos, said the codes which are to serve as catalyst for enhanced and credible economic activities in Nigeria, have the potency to stimulate sound internal control and protection of investments and asset.
Corporate failures in Nigeria and around the world has necessitated it. The U.S. had experienced the collapse of giants like Enron, Worldcom among others while Nigeria’s experiences include the then African Petroleum (AP), Lever Brothers now Unilever, Cadbury Nigeria Plc while many are still inflicted with the margin loan scandal that rocked the capital and money market in the late 2000s.
Obazee said national code of corporate governance will mitigate these failures as focus has shifted from persuasive to enforcement and regulation.
“For us in FRC we believe that only enforcement and regulation of the national code of corporate governance will lead to financial stability and sustained wealth creation.
“We also can attest that the persuasive nature of existing codes of corporate governance accounted for the obstacles in implementing sustainable good corporate governance,”.