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SEC tasks shareholders on growth of companies

By on April 11, 2015

The acting Director General of the Securities and Exchange Commission (SEC), Mounir Gwarzo, has urged shareholders to increase their monitoring of companies with a view to contributing to their growth. Speaking at a seminar organised by Independent Shareholders Association of Nigeria (ISAN) in  Lagos on Wednesday, Gwarzo said shareholders  should  use the annual general meetings (AGM) of companies to  effect positive change that would impact on their financial performance.

Represented   by the  Head of Department Financial Standard & Corporate Governance, Mr. Edward Okolo, the SEC boss noted that the main duty of shareholders is to pass resolution at AGM by voting through their shareholding capacity.

This duty, he said, was particularly important as it allows the shareholders to exercise their ultimate control over the company and how it is managed.

According to him, the shareholders should understand that despite the fact the Board has been appointed to govern the activities of the company, they must also perform their own watchdog function by reviewing  the audited reports and accounts prior to the meeting with a view to raising valid observations or criticism on key areas  amongst others.

He pointed out that notwithstanding that companies hold AGMs to comply with requirements of the law, it has been observed that shareholders use AGM as a platform to make or take decisions that will impact positively in organisational wealth creation.

Meanwhile, the Guest Speaker, Chief Olusegun Osunkeye, who spoke on the theme: “AGM as platform for value optimisation,” said AGM is the shareholders’ forum where they receive details of the company’s performance in the previous year and the outlook and plans for the ensuing year.

He noted that AGM is also a forum for shareholders to give specific approvals for example, for final dividend, scrip or bonus issues, raising capital, acquisition or divestments.

“It is appreciated that shareholders, employees, customers and suppliers contribute to the success of the company but the AGM is the exclusive platform of shareholders to have their say about the company’s performance,” he said.

He urged the shareholders to ensure that with their advocacy, laws and regulations are not inimical to business and investment growth, adding that collaboration improves effectiveness immeasurably while  engagement with the companies is preferable to confrontation.

“The AGM offers an opportunity to seek to protect and enhance the value of the members’ shareholding. Also, it is a forum for accountability, transparency and reporting from Board of directors to the owners of the business  that is  the shareholders who in general meeting the highest decision are making body of the organisation,” he said.

Explaining the purpose of the seminar,  the National Coordinator ISAN, Sir Sunny Nwosu, said it was  meant to  enlighten the members on they are expected to play at the various AGMs.

According to him, it is one of the ways ISAN is contributing to the  growth of companies and good corporate governance.

 

[ThisDay]