The war between the Central Bank of Nigeria (CBN) and Financial Reporting Council of Nigeria (FRC) is far from over. The apex bank complained at the weekend that the Council did not consider its recommendations on the ongoing review of the National Code of Corporate Governance.
In a circular signed by CBN’s Director, Financial Policy & Regulations, Kelvin Amugo, titled: ‘Exposure Draft of the National Code of Corporate Governance Issued by the Financial Reporting Council of Nigeria,’ he said most of the CBN’s input/observations, submitted during the public hearing which it considered critical to the smooth operation of the banking industry were not considered in the released drafts.
The FRCN, after a public hearing held on June 30, last year, released drafts on the National Code of Corporate Governance, for Private, Public Sectors as well as Not-for Profit Organisations, on December 29, 2015.
The CBN said it also observed that other significant contributions from a number of banks and other financial institutions on the private sector code, were not also considered by the FRCN. “We advise on the need to ensure that relevant inputs that would enhance the status of the codes, as well as facilitate the efficient and effective operation of the financial system are factored-in by the FRCN before the codes are finalised,” he said.
The apex bank is, therefore, asking banks “to forward their input and/or concerns on the National Corporate Governance Codes to the Director, Financial Policy and Regulations Department by March 29, 2016 to enable us articulate a common position for the banking industry and to engage with the FRCN in respect thereof.”
FRCN Executive Secretary, Jim Obazee, had during the hearing explained that modern society believes that the era of very weak and persuasive corporate governance codes is long gone due to stiff competing environment for foreign direct investment; of which binding regulation is a major factor being considered by investors and stakeholders, hence the need for new code.
He said provisions have been made for the development and enforcement of a National Code of Corporate Governance in the Financial Reporting Council of Nigeria Act No. 6, 2011.
He said that Section 50 of the FRC Act, 2011 provides that the objectives of the Directorate of Corporate Governance shall be to develop principles and practices of corporate governance ; promote the highest standards of corporate governance; promote public awareness about corporate governance principles and practices; on behalf of Council, act as the national coordinating body responsible for all matters pertaining to corporate governance and promote sound financial reporting and accountability based on true and fair financial statements duly audited by competent independent Auditors.
Obazee said the Council shall enforce and approve enforcement of compliance with accounting, auditing, corporate governance and financial reporting standards in Nigeria.