Court lifts injunction against FRC public hearing on corporate governance code

Executive Secretary of the Financial Reporting Council of Nigeria, Jim Obazee -

Executive Secretary of the Financial Reporting Council of Nigeria, Jim Obazee –

A  FEDERAL High Court in Lagos has lifted the exparte injunction restraining the Financial Reporting Council of Nigeria (FRC) from going ahead with the public hearing on the proposed uniform code of corporate governance.

The lifting of the order by  Justice O. E Abang  followed the request by the counsel to FRC and Federal Ministry of  Industry, Trade and Investment, Dr Fabian Ajogwu (SAN), for variance of the earlier order stopping the holding of public hearing on the code.

The court, sitting in Lagos, agreed to lift the order stopping the public hearing.
However, hearing in the substantive suit continues.

According to the spokesman for  FRC, Mack Ogbamosa, who addressed newsmen on Monday, the council  has now set new dates and venues for the public hearing on the draft  code.

He said  the public hearing on public and private sectors would hold at the Lagos Sheraton Hotels and Towers on June 30, while the public hearing on not-for-profit organisations  would be held at Lagos Airport Hotels on July 2.

The public hearing was supposed to hold on May 19 before the court granted the exparte injunction restraining the FRC.

The new uniform  draft code, which was produced by a Steering Committee constituted by the Federal Government, under  the chairmanship of Victor Odiase, was issued on April 15 this year and is available for comment on the website of the FRC.

The uniform code is replacing the present set of six codes being operated by the  Cental Bank of Nigeria (CBN),Nigeria Deposit Insurance Corporation( NDIC), National Insurance Commission (NAICOM), Pensions Commission (PENCOM), Securities and Exchange Commission, (SEC),  Corporate Affairs Commission(CAC) and the Nigerian Communications Commission( NCC).

Ogbamosa, however, said the new code would be different from the previous ones because it would be mandatory, unlike the previous ones that were based on moral suasion.

He further disclosed that the uniform code would bring Nigeria in conformity with other parts of the world, while noting that countries like India, China and South Africa are attracting investments because of the excellent corporate governance put in place.

The new code is divided into three segments- public sector, private sector and not-for-profit organisations.

Major provisions of the private sector segment of the code include 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 and prohibition of continued dominant influence of “board retirees” to sustain board independence.

Others are joint auditors for listed and significant public interest entities and strengthening the authority of the audit committees by requiring that any override of their recommendations on external auditors’ appointment and reappointment or removal be subject to a 75 per cent override validity vote.

It also provided for strengthening of whistle blowing apparatus, prescription of definite time limits for the tenures of the Managing Director/Chief Executive Officer, executive directors and non-executive directors, appointment of only independent non-executive directors as chairmen of certain critical board committees, particularly audit, remuneration and nomination and mandatory rotation of external auditors every five years and possible re-appointment after a cooling off period of five years.

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