The Central Bank of Nigeria (“CBN”) issued the Code of Corporate Governance for Development Finance Institutions in Nigeria (“Code”) on 24th October 2018 via a CBN circular dated 26th October 2018. The Code was issued in furtherance of the recognition of the role of Development Finance Institutions (“DFIs”) and with the aim of guiding licensed DFIs towards entrenching good corporate governance standards and practices to ensure safe and sound management and the protection of stakeholder interests.
DFIs are specialized financial institutions established with a specific mandate to support critical sectors of the economy such as agriculture, manufacturing and micro, small and medium scale enterprises by providing funds for such sectors for economic development.
According to the CBN, the Code was issued following the incorporation of stakeholder comments to the exposure draft of the Code issued in February 2017.
The Code prescribes requirements for board responsibilities and composition; rights and functions of shareholders, equity ownership; protection of shareholders’ rights; rights of other stakeholders (employees, customers, etc.); disclosure and transparency; risk management; ethics, professionalism and conflict of interest; and compliance and sanctions.
The Code will become effective on 1st December 2018 and full implementation will commence from 1st April 2019.
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