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CBN calls for stakeholders’ inputs on Corporate Governance Code

By on March 23, 2016

The Central Bank of Nigeria (CBN) has advised the Financial Reporting Council of Nigeria (FRCN) to ensure that it considers the input of a wide-range of stakeholders in its preparation of the National Code of Corporate Governance (NCCG), for private, public sectors as well as not-for profit organisations.

The banking sector regulator also disclosed that it found out that most of the inputs by operators under its regulatory purview were not captured in the draft document.

The central bank stated this in a circular posted on its website that was obtained yesterday.
The FRCN, following a public hearing it held on June 30, 2015, released drafts on the NCCG for private, public sectors as well as not-for profit organisations in December 29, 2015.

But the CBN stated: “The Central Bank of Nigeria noted that most of its inputs/observations, submitted during the public hearing, which it considered critical to the smooth operation of the banking industry were not considered in the released drafts. The CBN also observed that other significant contributions from a number of banks and other financial institutions on the private sector code were not also considered.

“We advise on the need to ensure that relevant inputs that would enhance the status of the codes as well as facilitate the efficient and effective operation of the financial system are factored-in by the FRCN before the codes are finalised. Accordingly, we invite you (banks) to forward your inputs and/or concerns on the national corporate governance codes to the Director, Financial Policy and Regulations Department.”

In the proposed NCCG for the private sector, the code is to cover entities that only render operational returns as opposed to financial returns to designated regulators; requires a clear statement of the main purpose of a corporate board to clear any ambiguity; specification of a minimum board size of eight while the maximum board size is left to corporate needs; among others.

On the other hand, the public sector code stipulates a re-statement of the compliance and performance obligations of public sector entities; introduction of public entities (oversight) committee in each ministry, rather than a centralised oversight agency, among others.