Senator Udo Udoma Faults Proposed National Code of Corporate Governance

culled from Thisday Newspaper

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A former Senator and the Chairman, UAC of Nigeria Plc, Senator Udoma Udo Udoma has criticised the proposed national code of corporate governance (NCCG), saying that the Financial Reporting Council of Nigeria (FRC) is trying to usurp the powers of other regulatory agencies. Udoma made this remark at the 2015 public lecture of Chartered Secretaries and Administrators of Nigeria(ICSAN) held in Lagos. Speaking on the theme: “Governance: The synergy between leadership and followership,” he argued that there is no one-size-fits-all approach to corporate governance, noting that ” the corporate governance rule you need for a major bank cannot be the same with what you require for a biscuit manufacturer or a company trading in sugar.” Udoma added: “I am surprised and puzzled by the current attempt being made by the FRC to come up with they call a universal code of corporate governance. What does that mean? I understand that they are even extending the rules to churches, mosques and other not-for-profit organisations. I think we are carrying this thing too far. “I am even at a loss to understand under what authority they are proceeding with that? Even if they have power to enforce corporate governance code, which is arguable, does that also give them the power to make the rules?

This is because, the power to enforce, does not automatically give you the power to regulate. If it is, the police would have taken over the power to make laws from the National Assembly.

He continues “I believe that the FRC is attempting to usurp the powers of other regulatory agencies. I am not sure it was the intention of the National Assembly to create the FRC to be the super regulator that all other regulators report to. In fact when I saw the draft, there are aspects of it that seem to be amending the Companies and Allied Matters Act (CAMA.). “CAMA provides that the board should have a chairman, a managing director and a board member, but they are saying that a board should have a chairman, a managing director and a senior independent board member, who is supposed to monitor the performance of the chairman. If they want to amend CAMA, they should know the process of amending CAMA.” Udoma further noted: “This is why when I was chairman of SEC and we were looking at corporate governance, we set out what we felt was the minimum and we recognised that various other regulators such as the Central Bank of Nigeria, will have tighter ones for banks and so on so forth. And that is a normal thing, you have the minimum one and within each industry, you have the tighter one”.

The Governor of the Central bank of Nigeria Mr. Godwin Emefiele seems to toe a different line, as he describes the proposed uniform Code of Corporate Governance being developed by the Financial Reporting Council of Nigeria (FRC)  as “a veritable tool in the quest to guarantee investment in the economy”.

Chairman, Lagos Chapter of the Chartered Institute of Bankers of Nigeria (CIBN), Mrs. Taiwo Ige opines that the NCCG would ease regulation; “We have always talked about corporate governance as being self-regulating. If you imbibe the culture of corporate governance, you will feel comfortable within yourself because you must have done what is expected of you. So, anybody can come and have a look at what you have done without you being afraid. So the harmonised code is going to curb corruption and enthrone best practice. It would align the nation with what is done globally,”.

On his part, Mr. Jide Iyanda of the Nigeria Deposit Insurance Corporation (NDIC), argues that the National Code of Corporate Governance would enhance investor confidence in Nigeria.

“The international community and investors would have confidence in the Nigerian economy and the perception about Nigeria will improve significantly. Nigeria can get it right only when things are done appropriately in both the private and public sectors,” Iyanda added.

Similarly, Mr. Kola Abdul, Managing Director/Chief Executive Officer, Brent Mortgage Bank and Vice Chairman at the CIBN Lagos branch ,, who notes that the private sector had over the years been focused on getting things right so as to ensure that they remain as going concerns, argues that the bane of the Nigerian economy had been the public sector.

“There is no public governance in the public sector and we lack ethics in that sector. So, if the government has woken up from the slumber, to create a common standard and acceptable policy for all sectors in the country, then it is a welcome development. But the challenge I have with this is that as Nigerians, we are always ahead of regulations. As we are today, I can tell you that there are people looking at the loopholes with a view to exploiting them. But I hope that with the new government in place, we can overcome that challenge,”

Long live Nigeria!

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