The Financial Reporting Council (FRC), (the body vested with the power to ensure good corporate governance practices in the public and private sector) in January 2019 officially released the Nigerian Code of Corporate Governance 2018 (“the Code”). In 2016, the FRC released three draft Codes for Private Companies, Public Companies and Not-for-Profit Entities respectively, however they were suspended as a result of controversy surrounding the draft code for Not-for-Profit Entities.
This new code combines the codes for private and public companies and applies to:
i. All public companies (whether listed or not);
ii. All private companies that are holding companies of public companies or other regulated entities;
iii. All concessioned or privatized companies; and
iv. All regulated private companies being private companies that file returns to any regulatory authority other than the Federal Inland Revenue Service (FIRS) and the Corporate Affairs Commission (CAC).
The Code seeks to institutionalize corporate governance best practices in Nigerian companies and aims to promote public awareness of essential corporate values and ethical practices which will enhance the integrity of the business environment. It is our view that the Nigerian economy will benefit greatly if all companies adhere to the principles and recommendations laid out in the Code, as both foreign and domestic investors are encouraged and assured of a business environment that is regulated by professional business and ethical standards. The Code will take effect in January 2020 according to the Regulation on Adoption and Compliance with the Nigerian Code of Corporate Governance 2018.
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