BY NKIRUKA NNOROM

Shareholders under the aegis of Independent Shareholders Association of Nigeria, ISAN, have called on the Director General of the Securities and Exchange Commission, Ms Arunma Oteh, to sponsor a bill to the National Assembly that will make some of the provisions of the new Code of Corporate Governance binding on quoted companies.

Speaking under the backdrop of the proposed training and certification of companies directors to ascertain their credibility prior to assumption of office as being proposed by SEC, the National Secretary, ISAN, Mr. Adebayo Adeleke, stated that no matter how plausible the new code is, the SEC cannot foist it on companies without the backing of the law.

Adeleke said, “Some of the aspects of the new code are good and quite commendable but I told Arunma Oteh that she cannot force companies to abide by it. The only reasonable thing for SEC to do is to seek legislation to empower it to enforce some of the provisions of the new Code.”

“SEC should also remember that where any provision of the Code conflicts with the existing law of the Companies and Allied Matters Act, CAMA, the provisions of CAMA supersedes the Code. They should push for legislation,” he emphasized.

Pointing out some areas that need legislation, Adeleke said SEC should look at securing empowerment of the law to enforce its provisions on tenure of companies’ directors, tenure of audit committee members, retirement age of directors as well as qualification of audit committee members.

The new SEC Code addresses certain contemporary issues, and aims to promote good corporate governance in public companies in Nigeria. However, it also has practical implications and challenges for boards, directors, management, assurance providers and stakeholders.

As it is, the new Code provides for three year tenure for directors upon completion of which, they should re-offer themselves for re-election.

The audit members should be re-elected every two years, while retirement age of directors was pegged at 70 years. “Subject to satisfactory performance and the provisions of Companies and Allied Matters Act (CAMA), all directors should be submitted for re-election at regular intervals of at least once every three (3) years.