Enforce your code of corporate governance, CBN tells SEC
The Central Bank of Nigeria (CBN) has called on the Securities and Exchange Commission (SEC) to make its code of corporate governance mandatory by enforcing compliance.
Speaking at the annual round-table on corporate governance with the theme, ‘Taking Responsibility for the new Code Corporate Governance,’ held in Lagos, CBN’s Deputy Governor, Kingsley Moghalu, said there is need for SEC to be more robust in its enforcement of compliance with its corporate governance code.
Moghalu said that the Commission should take a cue from the CBN efforcement of its corporate governance for banks, as reflected in the recently implemented banking reforms.
He said through the reforms the apex bank has made corporate governance a major issue in the banking industry
In its code of corporate governance released in April last year, SEC stated that it is not intended as a rigid set of rules but to serve as a guide to facilitate sound corporate practices and behaviour.
“In a country where there is little respect for ethics, guides may not be enough. We know about all the exuberances and sharp practices in not just the banks but in a lot of the quoted companies.”
He said despite the responsibility of shareholders to ensure that companies comply with the code, SEC should also monitor and enforce compliance.
“The CBN has taken a very proactive approach in this matter as regards the banks. We have said it is good for you to reflect if you have complied with the code of corporate gover-nance but we are also baring our minds to our responsibility to enforce the code.”
The SEC code places responsibility of ensuring compliance on the board of directors, the shareholders.
“SEC should be the third layer in my view that should make sure that they have done what they are supposed to do. Of course, the market is also supposed to play its role by sanctioning those companies that have not complied.”
Moghalu said a high standard needs to be attained in the area of corporate governance compliance and enforce-ment in order to ensure discipline in the corporate environment.
