Since 2011, the Federal Reporting Council of Nigeria (“FRCN”) had been navigating certain legal hurdles in its bid to regulate the operations of companies (public sector, private and Not-For- Profit). However, on 17th October, 2016, it finally issued a three-in-one National Code of Corporate Governance (“NCCG”) aimed at regulating governance issues within organizations in Nigeria.
The newly issued NCCG is divided into three (3) codes, to wit:
- National Code of Corporate Governance for the Private Sector in Nigeria 2016 (“Private Sector Code”);
- Public Sector Governance Code in Nigeria 2016 (“Public Sector Code”); and
- Not-For-Profit Organizations Governance Code 2016 (“Not-For-Profit Code”).
Whilst it is expressed that both the Private Sector Code and the Not-For-Profit Code take immediate effect from the date (17th of October 2016) of their release, the Public Sector Code is scheduled to take effect after an executive directive from the Federal Government of Nigeria, has been secured.
According to the FRCN, the delay announcing the effective date of the Public Sector Code “is due to the fact that the enabling laws that set up most government establishments already carry some form of governance structure that will require an umbrella legislation to unify the different provisions of those laws to synchronize with this Code”.
On a preliminary note, we find this explanation on why the Public Sector Code cannot be effective at this time, rather curious given that the same argument could be made with respect to why the Private Sector Code should not become effective immediately given that different companies within the Private Sector already have different and varying “governance” rules applying to them.
On the back of our preliminary note, we will, in this newsletter, critic in some detail, the provisions of the Private Sector Code which attempts to harmonize and unify all the existing sectoral corporate governance codes in Nigeria whilst granting to the FRCN, superior regulatory powers over all other sector-specific regulators as it pertains to corporate governance issues.
Additionally, this newsletter analyses the new innovations introduced into the corporate governance regime in Nigeria as well as the legal and regulatory implications on doing business in the Nigerian private sector.
