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

Enforcement:

Violation of any provision of the Code by any affected company shall attract “both personal sanctions against the persons directly involved in the violation, and sanctions against the companies or firms involved in such violation”[76] and the enforcement of the Code shall be the responsibility of the FRCN and sectoral regulator, where applicable[77].

A sectoral regulator in exercise of its regulatory functions shall in its guideline, provide for sanction for violation of this code, in respect of the sector it regulates and where sanctions have been so imposed, the person or the firm is precluded from making any reimbursements to the person or firm so sanctioned[78].

Transition

In accordance with the transitional arrangement provisions of the Code, an entity shall begin the application of the Code “in its annual reports for the periods beginning on or after 17th October 2016”. However, an entity that applies the Code in its annual report earlier than this time is required to disclose that fact, in the report[79].

CONCLUDING REMARKS

Although, the objectives of the Code appear laudable and should engender good corporate governance culture across all sectors of the Nigerian economy, if well implemented, we think it noteworthy to point out that the implementation of the Code, (which can, at best, be termed as “guidelines” as they were not birthed by any legislative process in the National Assembly), may be faced with major hurdles, given the inconsistency with quite a few of its provision, with substantive law.

Without more, the Code in its present form, cannot operate to amend or repeal either FRCN Act[80] or any other legislative enactment; and where any provisions of the Code is inconsistent with the FRCN Act and/or any extant Nigerian Law, same stands the risk of being declared null and void, to the extent of their inconsistency, by a law court, at the instance of any interested party.

Thus, certain provisions of the Code, which are inconsistent with extant legislation on relevant issues may be difficult to enforce, or cause further regulatory overlap, which the unification and harmonisation of the existing codes have sought to end.

Finally, even though, the drivers for the National Code are commendable, since the Code is expected to help build culture of probity and accountability in the management of business organizations; to prevent organized fraud, corruption of all shades and corporate failures, we hold the considered view that where the Code clearly conflicts with any extant legislation, it (the Code) should be amended so as to forestall widespread disregard of its provisions. We also encourage periodic updates of the provisions of the Code, so as to assure that same conform with relevant statutes and international best practices.

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[76] Section 37.1 of the Code
[77] Section 37.2 of the Code
[78] Section 37.3 of the Code
[79] Section 39 of the Code
[80] On the relationship between a principal legislation and a subsidiary legislation, see the Supreme Court in Adene & Ors v Dantubu (1994) 2 NWLR [Part 382] at p. 509 

The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo

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