Nigeria to establish corporate governance index for listed companies
The Nigeria Stock Exchange (NSE) is to establish a Corporate Governance Index system for listed companies in Nigeria as a way of redressing the perceived inadequate disclosures, corruption and poor business environment and corporate governance in the capital market.
Chairman of the Board of the Securities and Exchange Commission (SEC), Suleiman Ndanusa, said at the inauguration of the reconstituted Administrative Proceedings Committee (APC) on Wednesday in Abuja that this was intended to build greater trust and integrity in the markets and ensure that it serves as a mechanism for fair hearing to persons suspected to have violated the Securities Act.
The Corporate Governance Ranking System would provide data and Information that the NSE would rely on to build a Corporate Governance Index that would help score listed companies based on the quality of their corporate integrity; corporate compliance; understanding of fiduciary responsibilities by their directors and their corporate reputation.
The four factors are not equally weighted with corporate integrity carrying the highest and corporate reputation the least weighting.
He said the committee, established about 13 years ago, following the enactment of the Investments and Securities Act (ISA) 1999, was re-structured for greater efficiency and effectiveness, adding that its mandate does not cover deliberations on criminal violations that are under the jurisdiction of the law enforcement agencies and the Office of the Attorney General of the Federation.
“The strategic role of the Committee includes ensuring discipline and justice in the capital and other securities market,” he said, adding that members must adhere to the highest level of confidentiality, ethics and professionalism in their conduct and discharge of their mandate.
The four-member Committee, which has the Director General of SEC, Arunma Oteh, as Chairman, would be made to subscribe to a code of ethics to instill confidence in their capacity to strengthen the confidence and integrity of the capital market.
Chief Executive Officer of the NSE, Oscar Onyema, said the NSE is partnering with the Convention on Business Integrity (CBi) to provide a constant flow of information and data that would be used to develop a Corporate Governance Ranking System for listed companies in Nigeria to empower people, their transactions, systems and institutions tackle corruption.
Mr. Onyema said the NSE placed Corporate Governance as one of its critical fundamentals for ensuring a sound investment environment and maximizing investor returns, adding that the creation of the Corporate Governance Index is in line with the NSE’s commitment to promoting firm and fair corporate governance regime for sustainable growth of the nation’s capital market.
“We are proud to partner with CBi, and confident that this will contribute to our goal of becoming the gateway to African markets” he said.
Executive Director of CBi, Soji Apampa, said the Corporate Governance Ranking project to be funded under the World-Bank, would be supervised by Siemens Integrity Initiative, while IT systems and e-learning technology would be deployed to make the ranking process efficient and cost effective.
The Humboldt-Viadrina School of Governance, Berlin has been appointed as independent observers of the process to report independently to investor fora on the process applied to establish Nigeria’s Corporate Governance Ranking and help promote it internationally.
He said the primary interest of the school include research, assessment of the underlying motivations of companies to participate in the Corporate Governance Index of the NSE and their global project to document incentives and sanctions used in the fight against corruption.
