The source of this material is SEC.gov.ng
The Financial Reporting Council of Nigeria (FRN) issued the Nigerian Code of Corporate Governance (NCCG) in 2018. It replaces all existing sectorial Codes of Corporate Governance in Nigeria. The Securities and Exchange Commission subsequently developed the SEC Corporate Governance Guidelines (SCGG). Public companies are required to comply with the provisions of the NCCG and the SCGG.
The Nigerian Code of Corporate Governance (NCCG) 2018 is applicable to all sectors of the economy. However, given the peculiarity of the Capital Market, the SEC issued additional recommended practices – found in the SEC Code of Corporate Governance for Public Companies in Nigeria (2011). The recommended practices will increase standards of transparency, accountability and good corporate governance of companies, without unduly inhibiting enterprise and innovation.
These recommended practices (Guidelines) are structured along the Principles of the Nigerian Code of Corporate Governance 2018.
The Guidelines are as follows;
Guideline 1 – BOARD STRUCTURE AND COMPOSITION
Membership of the Board shall not be less than five (5).
Guideline 2 – FAMILY AND INTERLOCKING DIRECTORSHIP
2.1. To safeguard the independence of the Board, not more than two members of the same family shall sit on the Board of a public company at the same time.
2.2. To safeguard the objectivity and independence of the Board, cross membership on the boards of two or more companies should be discouraged. However, where it will lead to a conflict of interest situation as in cross-membership(s) on boards of competing companies, then it shall be disallowed.
Guideline 3 – OFFICERS OF THE BOARD
Board papers should be made available to every member of the Board at least one week prior to the date of the Board or committee meeting.
Guideline 4 – INDEPENDENT NON-EXECUTIVE DIRECTORS
4.1. Every public company shall have a minimum of one Independent Director on its Board.
4.2. An Independent Director:
Shall not be a Partner or an Executive of the company’s statutory audit firm, internal audit firm, legal or other consulting firm that have a material association with the company; or
Has not been a partner or an executive of any such firm for three financial years preceding his/her appointment.
Guideline 5 – NOMINATION AND GOVERNANCE
The Nomination and Governance Committee shall perform the following:
Review the performance and effectiveness of the subsidiary company Boards on an annual basis where applicable;
Prepare a job specification for the Chairman’s position, including an assessment of time commitment required of the candidate; and
Provide input to the annual report of the company in respect of Director compensation.
Guideline 6 – AUDIT COMMITTEE
Whenever necessary, the Committee may obtain external professional advice.
Guideline 7 – RISK MANAGEMENT COMMITTEE
The CEO/MD, Executive Directors and the Head of the internal audit unit must be in attendance at the meetings of the Risk Management Committee.
See the rest of the guidelines here.
PENALTY FOR NON COMPLIANCE WITH THE NIGERIAN CODE OF CORPORATE GOVERNANCE (NCCG) AND SEC CORPORATE GOVERNANCE GUIDELINES.
Any Company/Entity that violates the provisions of Nigerian Code of Corporate Governance and the SEC Corporate Governance Guidelines shall be liable to a fine of N500,000.00 in the first instance and a further sum of N5, 000.00 for every day the violation persists and or any other sanction as the Commission may deem fit in the circumstance.
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