The Federal Government, Thursday in Abuja, inaugurated a 16-man steering committee on national code of corporate governance, to improve the country’s competitiveness and address some of the issues that have been discouraging investors.
While inaugurating the committee in Abuja yesterday, the Minister of Trade and Investment, Olusegun Aganga, explained that the committee is charged with the responsibility of developing a national code of corporate governance in accordance with Section 11 of the Financial Reporting Council of Nigeria Act No. 6 of 2011.
Aganga said the need to separate ownership and control is being given enormous attention in the global circle in order to checkmate corporate scandals widely celebrated all over the world.
Citing Enron, WorldCom, Parmalat and most recently the sub-prime financial catastrophe, he pointed out that Nigeria cannot afford to sit on the fence.
“Corporate governance failures have now been proved to be at the very heart of the global financial crisis. This is because the supposed risk management system in most corporate entities did not work. Since corporate boards did not live up to their responsibilities and the ‘gatekeepers’ such as financial analysts, rating agencies, prudential regulators etc did not draw the investing public and other relevant stakeholder’s attention to systemic risks,” he said.
He argued that the urgency for a mandatory code of corporate governance can be discerned from the multiplicity of corporate governance codes currently applicable in Nigeria.
The minister noted that a good number of these codes are put in place by regulatory bodies like the Central Bank, National Insurance Commission, Corporate Affairs Commission and the likes, in order to meet some quick fix in the course of their regulatory functions. This he said had yielded some good results in the past.
According to him, “the efforts of these institutions vindicate the fact that all of their operators who have interest in financial reporting and corporate governance share the common concern that corporate governance reporting should ideally meet acceptable level of quality and international comparability.”