Unifying Nigeria's Sectoral Corporate Governance Regimes Through A National Code Of Corporate Governance For The Private Sector

On a final note, External Auditors are now mandated to report to FRCN, any information which they discover during an audit that leads them to believe that the company or anyone associated with it has committed an indictable offence under the Companies and Allied Matters Act, Cap C20 Laws of the Federation on Nigeria 2004, any other Statute, or regulation(s). 

Relationship with Shareholders:

The Code also makes provisions shaping the relationship of the Board with the shareholders, in addition to those earlier specified in the CAMA. These cover areas such as: Protection of Shareholder Rights[55]; Role of Shareholders’ Associations[56]; and Institutional Investors[57]. In addition, the Code makes provision for venue[58] and notice[59] of general meetings.

Specifically, the Code provides that the venue of general meetings shall be accessible to shareholders, so as to ensure such shareholders are not disenfranchised on account of choice of venue. The Code also provides that notices of general meetings shall be at least twenty-one (21) days from the date on which the meeting would be held, which differs from the provisions of CAMA which prescribes twenty-one (21) days’ notice from date on which the notice was sent out[60], and also stipulates that a general meeting of a company shall, notwithstanding that it is called by a shorter notice, (that is, less than twenty-one (21) days), be deemed to have been duly called. To our mind, the fore-going provision of the Code, conflicts with the provision of CAMA relating to shorter notice, since period of notice in the Code was strictly pegged at not less than twenty-one days, without the option of convening a meeting at shorter notice.

Minority Shareholder Protection:

The Code makes prohibitions against such activities that may occasion Minority Interest Expropriation[61]; Insider Trading[62]; Related Party Transactions[63]; and Conflict of Interests[64] in the conduct of the affairs of private companies.

Relationship with Other Stakeholders:

The Code puts “Sustainability Issues”[65] at the core of the relationship of the board of private companies with other stakeholders outside. Pursuant to the provisions of the Code, private companies shall, henceforth, pay adequate attention to the interests of their stakeholders such as employees, creditors, consumers, suppliers, trade unions, host community, government, the general public and future generations[66].

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[55] Section 22 of the Code
[56] Section 26 of the Code
[57] Section 27 of the Code
[58] Section 23 of the Code
[59] Section 24 of the Code
[60] Section 217(1) of CAMA
[61] Section 28 of the Code
[62] Section 29 of the Code
[63] Section 30 of the Code
[64] Section 31 of the Code
[65] Section 32 of the Code
[66] Section 32.1 of the Code