FRC Guidance for Reporting on Compliance with The Nigerian Code of Corporate Governance (NCCG) 2018

Proshare

Wednesday, June 24, 2020   / 02:37 PM / A 28 May 2020 FRC Release / Header Image Credit: Ecographics

 

Proshare Nigeria Pvt. Ltd.

 

Engagement with Sectoral Regulators

 

We refer to Paragraph D of the Introduction section of Nigerian Code of Corporate Governance 2018 (NCCG 2018 or the Code) on Monitoring the Implementation of NCCG 2018, which provides that, "The implementation of this Code will be monitored by the FRC through the sectoral regulators and registered exchanges who are empowered to impose appropriate sanctions based on the specific deviation noted and the company in question.

 

. . . In consonance with the relevant regulatory agencies of the Federal Government of Nigeria, the Council will subsequently issue corporate governance guidelines to assist implementation as may be required to respond to prudential considerations in different sectors of the economy."

 

In furtherance of this, the Financial Reporting Council of Nigeria (FRC or Council) has been engaging with all Sector Regulators, for the purpose of developing Sectoral Guidelines of Corporate Governance on specific requirements relevant to each sector which are not covered under NCCG 2018.

 

This process is ultimately important because all existing sectoral codes of Corporate Governance are to be withdrawn, and Sectoral Guidelines of Corporate Governance will be issued to address sector specific matters or requirements on Corporate Governance. To this end, NCCG 2018 as the National Code, would be the only Code of Corporate Governance in Nigeria.

 

At the current time, the Council's expectation is that the Sectoral Guidelines would be released once the engagement with Sectoral Regulators is completed. Additional information in this regard will be provided subsequently. 

 

Reporting Template

 

We also refer to Paragraph 1(2) of the Regulation on the Adoption and Compliance with the Code, and issued pursuant to Section 73 of the Financial Reporting Council of Nigeria Act of 2011, which provides that, all public companies (whether a listed company or not; all private companies that are holding companies of public companies or other regulated entities; all concessioned or privatised companies; and all regulated private companies being private companies that file returns to any regulatory authority other than the Federal Inland Revenue Service (FIRS) and the Corporate Affairs Commission (CAC), shall report on the application of the Code in their annual reports for financial years ending after January 1, 2020 in the form and manner prescribed by the FRC.

 

The FRC set up a Web Portal Committee (WPC) comprised of stakeholders, which contributed to the development of an online portal for electronic submissions of reports on compliance with the NCCG 2018. Members of the WPC also worked with the FRC and others to develop a reporting template to simplify and harmonize Code compliance reporting by reporting entities. Reporting entities are expected to access, complete, and submit the reporting template online. The online portal is still at the stage of development and a link to the portal will be made available in a subsequent communication.

 

Until the web portal is completely developed, companies are expected to download the reporting template from the FRC's website at www.financialreportingcouncil.gov.ng, complete it and submit a copy of the completed report to: (1) their sector regulators; (2) the FRC at fookediran@financialreportingcouncil.gov.ng; and, for listed companies, the stock exchanges on which they are listed. Additionally, a completed copy of the reporting template should be hosted on the investors' portal on the company's website for a minimum of five (5) years, alongside the company's communication policy, annual reports, and other relevant information as indicated in Section 27.4 of the Code.

 

The Council hereby directs as follows on Table 1 below, regarding timelines for completing the template for reporting on compliance with the Code for financial years ending after January 1, 2020in view of varying financial year ends adopted by reporting entities (The Financial Reporting Council of Nigeria hereby conveys regulatory forbearance to accommodate the inevitable global effects of the COVID-19 pandemic and delayed issuance of the reporting template).

  

Table 1

 Proshare Nigeria Pvt. Ltd. 

 

Reporting in the Annual Report

 

Paragraph1(2) of the Regulation on the Adoption and Compliance with the Code states that reporting entities are to report on their application of the Code in their annual reports. Please note that the completion and submission of the reporting template described above will be deemed to satisfy this requirement for reporting on the application of the Code, as well as the requirements indicated in the Code.

 

However, reporting entities are required to include in the Governance Report included in their annual reports, an abridged version or summary of the following matters included in the Code.

a)    Section 12.6 - processes used in relation to all Board appointments;

b)    Section 15.2 - summary of the report of the annual corporate governance evaluation and the extent of the application of the Code, as well as the name of the consultants, where independent experts have been engaged;

c)     Section 16.8 - remuneration policy, as well as the remuneration of all directors;

d)    Section 16.13 - sitting allowances, Directors' fees and reimbursable travel and hotel expenses, as well as any other allowances and benefits made to NEDs;

e)     (e)Section 17.7 - the risk management framework;

f)      Section 18.2 - where the Board has decided not to establish an internal audit function, whether internally or outsourced, and sufficient reasons for not doing so, and explanation as to how the Board has obtained adequate assurance on the effectiveness of the internal processes and systems such as risk management and internal control;

g)    Section 28.1 - clear information on the Company's governance structures, policies and practices as well as environmental and social risks and opportunities;

h)    Section 28.2 - a summary of the matters indicated in paragraphs (a) - (n), which should cover information relating to the following matters:

  • Composition of the Board and Board Committees, including names of chairmen and members of each Committee;
  • Description of the roles of the Board Committees, number of meetings held and attendance of individual directors;
  • Gender diversity on the Board and employment;
  • Board appointment, induction and training process;
  • Summary of Board, Committees, individual Directors' and overall governance evaluation;
  • Changes on the board and directors standing for re-election;
  • Tenure showing cumulative years of service of each Director, the external auditor, and external consultant engaged to perform the governance evaluation;
  • Code of Business Conduct and Ethics for directors, management and other employees;
  • Human Resource policies and internal management structure;
  • Sustainability Policies and Programmes;
  • Policy and cases of clawback;
  • Fines and penalties
  1. Section 28.3 - the nature of any related party relationships and transactions;
  2. Section 28.4 - any material matter even though not specifically required by the Code to be disclosed, but if in the opinion of the Board such matter is capable of affecting the present or anticipated financial condition of the Company or its status as a going concern;
  3. Section 28.8 - statement by the Board on the Company's ESG activities. This should be reviewed by an appropriate Board committee and may be subject to independent review. 

 

Other Matters

 

The NCCG 2018 can be accessed on the FRC's website via this LINK. 

 

Proshare Nigeria Pvt. Ltd.

 

Kindly Download the Nigerian Code of Corporate Governance HERE. 


 

Proshare Nigeria Pvt. Ltd. 

 

Related Downloads

 

Proshare Nigeria Pvt. Ltd.

 

Related News - Corporate Governance

1.      FBNHoldings wins World Finance Best Corporate Governance in Nigeria Award

2.     Ahead of Tomorrow on WebTV: Discussions on Focus on IOD and Corporate Governance In Nigeria

3.     COVID-19: Some Considerations Relating to Corporate Governance

4.     NSE Demutualization Will Promote Better Corporate Governance - Aigboje Aig-Imoukhuede

5.     FRC Issues Guidance for External Auditors and Matters to Consider During COVID-19 Period

6.     COVID-19: Joint Statement by the FCA, FRC and PRA

7.     Federal High Court Judgment in the Case of ICAN v. FIRS and CITN

8.     Nigeria Corporate Governance Code 2020: Ethics, Sustainability Crucial for Companies - Tosin Ajose

9.     The FRCN Nigerian Code of Corporate Governance 2018

10.  The New Harmonised Code of Corporate Governance - Legal Alert

11.   The FRCN Nigerian Code of Corporate Governance 2018 - Jan 18, 2019

12.  Executive Summary of Changes to CAMA - May 16, 2018

13.  The Un-Enforceability of the Nigerian FRC's Code of Corporate Governance - Nov 08, 2016

14.  CBN Requests for Inputs on National Code of Corporate Governance Issued by FRCN - Mar 21, 2016

15.  S. 306 of ISA 2007 and Whistleblowers in Nigeria - Jan 21, 2014

16.  How to run a Whistleblower Program - US SEC Awards More Than $5 M to Whistleblower  - May 18, 2016

17.  Reps Pass Companies and Allied Matters Act Re-enactment Bill

18.  New Transfer Pricing Regulations, Guidelines and Circular - Legal Alert

19.  Copyright Collective Societies'' Regulations Revisited - Legal Alert

20. Shares Pump and Dump Schemes - Legality - Proshare Jul 18, 2018

21.  Sales Tax versus VAT: Supremacy - Case Law Review

22. Fire Safety Compliances and Regulations

23. Admissibility Of Evidence As It Relates To Electronic Devises, Social Media And Forensic Science

24. New Requirements For Registration Of Charges (Form CAC8) Takes Effect April 3, 2018

25. FIRS issues Public notice on Implementation of the Revised 2018 Transfer Pricing Regulations  Oct 22, 2018

26. Senate Passes Resolution Mandating CBN To Suspend Bank ATM Charges

27. NASSBER Bills - A Status Update On Market Related Legislation

28. Stakeholders explore the Role of IST in Nigerian Capital Market Dispute Resolution

29. Regulatory Conversations - A Public-Private Dialogue Holds On Sept 18, 2018

30. Buhari Signs Law Separating NFIU from EFCC

31.  Unconstitutional, Null And Void - Legal Opinion On Preservation Of Suspicious Assets Order

32. The Draft Nigerian Code of Corporate Governance 2018 For Your Input

33. 2018 Nigerian Code of Corporate Governance: Sectorial Codes to Serve as Guidelines - FRC

34. Landmark FHC Judgment On The Information Rights of Investors In The Nigerian Capital Market

35. Executive Summary of Changes to CAMA

36. Senate Passes New CAMA Bill into Law; Lists Seven Benefits

37. Finance and Accounting Outsourcing

38. Judgment Delivered Against Plaintiff In First Nigerian Case on ATM Dispense Error

39. Communique of the 58th Annual General Conference of the NBA

40. IFRS Reporting - Matters Arising On Derivatives

41.  Corporate Governance As A Strategy For Investment Drive - August 2018

42. Nigerian Patient' Bill of Rights: 5 Things to Note

43.   IFRS 15 Implementation Efforts of 2018 Interim Reporters in the Oil and Gas Industry 

 

 Proshare Nigeria Pvt. Ltd.

 

Related News - Business Regulations, Law & Practice

1.      Maritime Anti-Corruption Network to Scale Up Collective Action in Nigeria with support from Siemens

2.     Experts discuss the Future of Virtual Hearing in Arbitral Tribunal

3.     Intercontinental Apex Regulator's Virtual Session

4.     GTI Finance Academy to Host a Certified Virtual Training Program on IFRS 13

5.     Detail Solicitors Holds Webinar On Great Expectations Workplace and Wealth

6.     Federal High Court Discharges Interim Order and Strikes Out Suit Against NIPC

7.     Ahead of Tomorrow on WebTV: Discussions on COVID-19; Deepening Corporate Governance in Nigeria

8.     COVID-19: Some Considerations Relating to Corporate Governance

9.     Ahead of Tomorrow on WebTV: Discussions on COVID-19; Institutions, Governance and the Economy

10.  Contracts During a Public Health Pandemic - Legal Alert

11.   Directors Duties in The Context Of COVID-19

12.  NSE Issues Guidance on Companies' Virtual Board, Committee and Management Meetings

13.  Policy and Regulatory Measures against the Coronavirus Pandemic in Nigeria

14.  PTF-COVID-19 Issues Implementation Guidance For Lockdown Policy

15.  Presidential Directive on Lockdown: LASG Exempts MAN Entire Supply Chain

16.  Hotels and Recent Tax Amendments - Legal Alert

17.  President Buhari Signs COVID-19 Regulations 2020

18.  COVID-19 and Commercial Transactions: Some Emerging Legal Issues

19.  The Infection Diseases (Emergency Prevention) Regulations 2020 - Lagos State

20. NCDC Issues Guidelines for Employers and Businesses in Nigeria

 

 Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP