BY NKIRUKA NNOROM

The newly introduced Corporate Governance Rating System, CGRS, will raise attractiveness of quoted companies for cross-border listings as they are more likely to meet the listing requirements of target markets, says Oscar Onyema, Chief Executive Officer of the Nigerian Stock Exchange, NSE.

Delivering a welcome address at a briefing session on CGRS with CEOs of quoted companies, Onyema said with the system in place, listed companies would become more attractive to both local and foreign investors, who would want to be sure that their investments are safe and there is awareness within the board about appropriate oversight.

“Listed companies will be better managed and governed in general. Their boards will be fully aware of their fiduciary responsibilities and operate by the highest standards of corporate governance ethics and processes.

Foreign and local investors will be attracted to these companies for long term investments as better managed companies are more sustainable. This will lead to the growth of the Nigerian economy as a whole, the NSE boss declared.

He added that listed companies that have high ratings will typically have lower cost of funds and will become more competitive in their industry and across geographies, as corporate governance is a strong competitive tool.

Represented by Haruna Jalo-Waziri, Executive Director, Business Development, NSE, Onyema said that designing the CGRS for listed companies was borne out of the desire to raise the standards of corporate governance in Nigeria, adding that significant thought, research and brain storming went into developing the CGRS.

According to him, “There are several reasons to strive for good corporate governance. A company that is regarded as having good corporate governance has access to a variety of financing options.

Moreover, it is well established that companies with good corporate governance generally receive higher market valuations than those that are regarded as poorly governed.”