Rabiu Olowo’s First Year at FRC: Achievements, Challenges
Perspective
Donatus Eleko
Since he was appointed the Executive Secretary/Chief Executive Officer of the Financial Reporting Council (FRC) of Nigeria, Dr. Rabiu Olowo, has continued to drive the transformation of the regulatory and financial reporting agency.
Olowo, a highly accomplished Corporate Reporting and Public Finance Leader with a proven track record in developing and implementing Corporate Governance practices in both private and public institutions, has not hidden his passion for the job as he continues to take steps to change the narrative at the agency.
As a Professor of Practice in Forensic Accounting, Finance & Public Policy, his expertise and experience have significantly impacted the FRC’s mission of promoting transparency, accountability, and excellence in financial reporting.
With a distinguished academic background and a wealth of professional qualifications, Olowo has ushered in a breadth of knowledge at the FRC, with a drive to ensure improved accuracy and reliability of financial reports and corporate disclosures in the country.
Armed with an MBA from the University of Lagos, an MSc. in Accounting & Finance from Robert Gordon University in Aberdeen, UK, and a PhD in Forensic Accounting and Auditing, the Chartered Accountant, Chartered Management Accountant, Certified Internal Controls Auditor, and a Certified Fraud Examiner, has in the last one year ensured improved standards among auditors and other professionals engaged in the financial reporting process; enhanced the credibility of financial reporting; and improved the quality of accountancy and audit services, actuarial, valuation and corporate governance standards.
Olowo’s previous role as Commissioner for Finance in Lagos State (2019-2023) also prepared him for this task as he has showcased exceptional leadership capabilities in managing the fiscal policies of one of Africa’s largest economies.
His appointment as the Executive Secretary of the FRC no doubt ushered in a new era of growth and innovation within the Council, through his transformation agenda, known as “DOSE”—which stands for Digitisation, Operational Excellence, Stakeholder Engagement, and Enforcement.
DOSE aims to establish the FRC as a leader in the global financial reporting landscape while ensuring balanced growth across its operations. One year into this transformative journey, the impact of Dr. Olowo’s leadership is evident across all directorates of the Council.
The FRC’s initiatives have garnered significant attention from both local and international stakeholders, showcasing its commitment to advancing best practices in financial reporting, auditing, and corporate governance in Nigeria.
Adoption of IFRS S1 and S2 Sustainability Standards
In the last one year, the FRC, under the leadership of Olowo, has secured the commitment of President Bola Ahmed Tinubu, along with the Minister of Industry, Trade and Investment, Dr. Doris Uzoka-Anite for the adoption of International Financial Reporting Standard (IFRS) S1 and S2 sustainability standards in Nigeria. Olowo, recently disclosed that with the early adoption stage of the IFRS S1 and S2, some listed entities have demonstrated leadership in reporting their sustainability-related risks and opportunities. He had listed Access, Fidelity Banks, Seplat Energy, and MTN, as s few companies that had started to comply with the new sustainability standards.
He said, “We have now entered the voluntary stage, which will run from 2024 to 2027, serving as a learning curve in preparation for the mandatory period beginning in 2028.”
The disclosure standards could unlock capital investments, safeguard the environment for future generations. The ISSB framework offers a groundbreaking approach for organisations to disclose climate-related risks and opportunities, enhancing transparency, consistency, and informed decision-making.
Launch of Roadmap for Sustainability Reporting Standards Adoption
The FRC under Olowo in April this year, released the roadmap report for the adoption of IFRS Sustainability Disclosure Standards in Nigeria. This report marked a significant step towards promoting sustainability and enhancing corporate reporting practices in the country. The report also outlined necessary steps and guidelines for the adoption of the IFRS Sustainability Disclosure Standards in Nigeria. These standards, developed by the International Sustainability Standards Board (ISSB), aim to provide a comprehensive framework for organizations to disclose their sustainability-related information. The Roadmap Report for Adoption of IFRS Sustainability Disclosure Standards in Nigeria was developed by the Adoption Readiness Working Group (ARWG) comprising industry regulators, donor agencies, preparers (private organisations), professional accounting organisations (PAOs), and assurance providers, amongst others.
Creation of Seven Directorates
Additionally, in the last one year, the FRC has achieved the full complement of the seven Directorates by making functional the Directorate of Valuation Standards and the Directorate of Actuarial Standards and the establishment of the Sustainability Reporting Unit. The significant development came years after the establishment of the Council and under the leadership of Olowo. The establishment of the new Directorates was a testament to the FRC’s commitment to fully implement the FRC Act 2011 (as amended) that provided for seven directorates and therefore created a robust and comprehensive oversight framework as envisaged in the Act establishing the Council. The Directorate of Actuarial Standards and the Directorate of Valuation Standards now play pivotal roles in enhancing oversight, ensuring the highest quality in financial reporting and corporate governance standards, and promoting confidence among investors.
Commencement of Audit Quality Reviews of Firms
The FRC has also commenced an audit quality review of firms to ensure credible financial reporting across the country. Olowo, described proactive regulation as a term used to describe approaches and programs that try to prevent regulatory and service problems from occurring by identifying harmful practices that could potentially lead to harm, rather than dealing with alleged misconduct after complaints are filed. He said: “The bedrock of the transformation agenda of the council going forward is to ensure maximum compliance with the FRC Act 2011 (as amended), and other statutory instruments released by the Council.
“FRC intends to give full credibility to any financial statements coming out of Nigeria in a way that investors can rely on the information in the statements.
“A new FRC that will be firm and fair in carrying out her mandate; that will hold corporates and individuals accountable; and that will restore confidence in corporate reports and governance in the Nigerian economy thereby enhance the renewed hope of President Bola Ahmed Tinubu,” he added.
Exposure Drafts of Public, Not-for-Profit Sectors Codes
The FRCN recently released exposure drafts for both the Nigeria Public Sector Governance Code and the Nigeria Not-for-Profit Governance Code, meaning these proposed codes are currently open for public comment and feedback before being finalized as official regulations. The goal is to establish standards and guidelines for good governance practices within Nigerian public sector entities and not-for-profit organisations respectively. These documents are currently exposure drafts, which means they are in the public consultation phase where stakeholders can provide input before the final codes are issued.
Establishment of Technical Working Group for IVSC
In a significant development aimed at advancing financial reporting and valuation standards, Nick Talbot, the Chief Executive of the International Valuation Standards Council (IVSC) this year paid a courtesy visit to Olowo, in Abuja. During the meeting, Olowo promised a continuous and mutually beneficial relationship between the IVSC and the FRC. He emphasised that the establishment of the Directorate of Valuation Standards on January 23, 2024, came at a crucial time when President Tinubu’s roadmap for economic transformation, aiming to achieve a $1 trillion economy. This roadmap emphasises the importance of sound financial reporting and corporate governance practices, connecting them to the overall economic goals of Nigeria. Olowo underscored the critical role played by robust valuation standards in ensuring credible financial reporting. Assuring the IVSC of FRC’s commitment to global best practices, Olowo emphasised that the Directorate of Valuation Standards will adhere to these standards in all its operations and practices.
Establishment of Nigerian Actuarial Development Programme
Under Olowo, the FRC has inaugurated the Nigerian Actuarial Development Programme (NADP) Workgroup to foster growth, innovation, and excellence within the field of actuarial practice in Nigeria.
The establishment of the workgroup underscored the FRC’s unwavering commitment to nurturing local talent, driving innovation, and propelling the profession of actuarial science forward in Nigeria. By uniting experts and stakeholders, the Council aims to cultivate a dynamic ecosystem that encourages collaboration, knowledge sharing, and continuous learning. The vision for the NADP workgroup is to cultivate a pipeline of skilled professionals who would fuel sustainable growth, advocate for financial inclusion, and mitigate risks within our economy. Through targeted training, mentorship, and capacity-building initiatives, the Council aspires to empower individuals to excel in this dynamic field and contribute meaningfully to our nation’s developmental agenda. The NADP Workgroup is led by Olowo as Chairman and Mr. Rotimi Okpaise as Coordinator and includes distinguished professionals from various organizations and institutions.
Integration of FRC’s Database with NIN and Issued SME CGG
Also, the FRC has in the last one year integrated its database with the National Identification Number (NIN) verification system for enhanced data integrity Completed and also issued the Small and Medium Enterprises Corporate Governance Guidelines (SME CGG) to boost activities of operators of small businesses. Furthermore, through strengthened collaborations with local and international regulators, professional bodies and associations, the FRC was voted as the Vice president of the African Forum of Independent Accounting and Auditing Regulators (AFIAAR) thereby enhancing Nigeria’s global recognition. Also, in the last one year, the Council has recorded enhanced technical capacity through professional development of staff both locally and internationally. Finally, it has cleared all outstanding employee gratuity claims and severance packages, thereby ensuring financial closure.
Challenges
The FRC no doubt faces several challenges in its mission to ensure the quality and relevance of financial reporting in the country. Some of the key challenges include limited resources, due to limited resources which hinders its ability to effectively monitor and enforce financial reporting standards; lack of awareness as many companies in the country are not fully aware of the importance of financial reporting standards or the need to ensure compliance, and the need to address complexity of Financial Reporting Standards and make financial reports less difficult to understand and implement.
Conclusion
Therefore, to address these challenges, the FRC must work to increase its resources, improve awareness and compliance with financial reporting standards, strengthen its enforcement mechanisms, provide technical assistance to companies, and build trust with the public and the business community.
Also, Olowo must remain focused on driving reforms at the FRC to ensure that the agency’s mandates of ensuring good corporate governance practices in the public and private sectors of the Nigerian economy; accuracy and reliability of financial reports and corporate disclosures, among others.
