FRC Insists New Corporate Governance Code Will Attract Investments

Ernest Chinwo in Port Harcourt

Some Nigerians have commended the Financial Reporting Council (FRC) and have also expressed confidence that the Nigerian Code of Corporate Governance that is being finalised by the council will attract local and foreign investments.

Speaking at the public hearing on the exposure draft of the Nigerian Code of Corporate Governance 2018 for South-south geopolitical zone in Port Harcourt, the Managing Director/Chief Executive Officer, Seplat Petroleum Development Company Plc, Austin Avuru, who was also the special guest of honour, noted that many indigenous companies have failed because of non-adherence to good corporate governance.

Avuru, who was represented by the Mrs Obianuju Othniel, said most indigenous firms die before 20 years while their foreign counterparts last for even centuries.

“In the oil and gas industry for instance, we like to ask why international oil companies (IOCs) are doing business successfully for more than 50 years while indigenous companies do not survive. The answer is simply good corporate governance. The secret is adherence to good corporate governance which instils discipline and accountability,” he said.

On the draft code, he said, “We applaud the efforts of the FRC and the Technical Committee on Corporate Governance. The code complies with international standards and we enjoin indigenous companies to imbibe compliance with the code so that their lifespan will be guaranteed.”

In his remarks, the President of Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture, Dr, Emi Membre-Otaji, also commended the FRC for the draft code and called on stakeholders to start implementing the provisions to enhance their growth.
“It may be a little more expensive at the onset but in the long-run, it very beneficial to the company,” he enthused.

In his presentation, the Executive Secretary of FRC, Daniel Asapokhai, said the Code would also enhance the integrity of the Nigerian capital market, by entrenching a culture of disclosure, transparency and accountability.

Asapokhai said, “It is our belief that this Code will promote ease of doing business, attract local and foreign investments and enhance the integrity of the Nigerian capital market, by entrenching a culture of disclosure, transparency and accountability. In addition, this Code will raise public awareness of good corporate governance practices.”

He revealed that the Nigerian Code of Corporate Governance has adopted the ‘Apply and Explain’ principle, which requires companies to apply the requirements of the Code and to explain how they did so.

The FRC boss said, “The decision to adopt the ‘Apply and Explain’ approach was made after careful considerations of several factors including the Nigerian legal system, Nigerian culture and history, government policies, state of the Nigerian economy, global economic and political climate, and levels of capital inflow of investment coming into the country.

“The Nigerian Code of Corporate Governance 2018 shall apply to all public companies; whether listed or not, all private companies that are holding companies of public companies and other regulated entities, concessioned and privatised companies, and regulated private companies.

“The Nigerian Code of Corporate Governance 2018 was developed based on a comprehensive review of the suspended 2016 Code of Corporate Governance by a fifteen-man technical committee, and extensive consultative and collaborative engagement with a wide range of stakeholders and other regulators.”