March 30, 2011 by Goddy Egene
Stakeholders in the nation’s capital market have thrown their weight behind the new Code of Corporate Governance issued by the Securities and Exchange Commission (SEC) for listed companies, which would become effective on Friday, April 1, 2011.
Speaking at a meeting on the new code in Lagos, Chairman of Nestle Nigeria Plc, Chief Olusegun Oshunkeye, former Chairman of Cadbury Nigeria Plc, Dr. Christopher Kolade, former Chairman of Institute of Directors (IOD), Ms. Benedicta Molokwu, and leading stockbrokers among others, commended the foresight of SEC in reviewing the 2003 Code to meet the current market realities.
Oshunkeye who is on the board of many companies, was the first to sign the code on behalf of Nestle, saying it has an inbuilt flexibility.
Oshunkeye said, “in particular, I want to refer to Part A paragraph 12b (of the Code), that those companies seeking to raise funds from the capital market are expected to demonstrate sufficient compliance with the principles and provisions of the code appropriate to their size, circumstances to their operating environment.
That is inbuilt flexibility and user friendly because one size does not fit all.”
In her contribution, Molokwu urged SEC to monitor compliance and conformity with the code, adding that there should be a mechanism through which companies would pledge to comply with the code.
Explaining the rational for the new code, Director-General of SEC, Ms. Arunma Oteh, said that before 2007 when the financial crisis started, stakeholders were not convinced of the need for a better code, declaring that as at today, everybody should be convinced even with the particular challenges Nigerian investors faced recently.
“For us at SEC, it is extremely important that we focus, as a community of the capital market, on good corporate governance. My inspiration for Nigerian capital market is that we have the highest standard. If we do what a country like Brazil has done, which is through the corporate governance index on their stock exchange, we can have companies aspire to measures of corporate governance of the highest standard in the world. That way, we can attract and retain capital whether from local investors and/or foreign investors”, Oteh said.