The Financial Reporting Council, FRC, has proposed incentives for whistle-blowers in the private sector, as part of its effort towards ensuring good corporate governance in that sector of the economy.
This is part of the provisions of the 2018 Draft Code of Corporate Governance of the FRC, to fight corruption in the private sector which had been considered critical for the nation’s anti-corruption war.
Speaking at the public hearing on the Draft Code, Executive Secretary/Chief Executive Officer, FRC, Mr. Daniel Asapokhai, said the whistle blowing policy of the federal government had brought clear gains in public administration, adding that workers in the private sector should be equally encouraged to report unwholesome practices in the private sector.
Under the new code, staff who report infractions would be rewarded and protected from victimization from the management.
Some of the areas that private sector workers would be expected to report their managements include payment of tax obligations, statutory remittances such as pension deductions and other sundry payments to the three tiers of government.
The Draft Code also makes it illegal for a Managing Director and Chief Executive Officer of a publicly quoted company to succeed the chairman of the company’s Board of Directors, except only after a period not less than three years of his exiting the post of managing direrctor.
He said: ”The Managing Director/CEO should not go on to be the chairman of the same company. If in very exceptional circumstances, the board decides that a former MD/ CEO or an ED should become chairman, a cool off period of three years should be adopted.”
Similarly, it would be unlawful for the same person to hold the position in the executive management of more than one company or for an MD, Executive Director to chair committees in their companies.
Executive Directors in many companies currently serve on Audit Committees of their companies.
Asapokhai said: “It is our belief that this code will promote ease of doing business, attract local and foreign investments and enhance the integrity of the Nigerian capital market, by entrenching a culture of disclosure, transparency and accountability. In addition, this code will raise public awareness of good corporate governance practices.”
He revealed that the Nigerian Code of Corporate Governance has adopted the ‘apply and explain’ principle, which requires companies to apply the requirements of the code and explain how they did so.
“The decision to adopt the ‘Apply and Explain’ approach was made after careful considerations of several factors, including the Nigerian legal system, Nigerian culture and history, government policies, state of the Nigerian economy, global economic and political climate, and levels of capital inflow of investment coming into the country,’’ he added.
According to the FRC Chief Executive Officer, the Nigerian Code of Corporate Governance 2018 shall apply to all public companies; whether listed or not, all private companies that are holding companies of regulated entities, concessioned and privatised companies, and regulated private companies.
The Nigerian Code of Corporate Governance 2018 was developed based on a comprehensive review of the suspended 2016 Code of Corporate Governance by a 15-man technical committee, and extensive consultative and collaborative engagement with a wide range of stakeholders and other regulators.
The public hearing was attended by members of Commerce Industry Mines and Agriculture, the media, and a host of other dignitaries from both the private and public sectors.
The event witnessed comments and reactions from stakeholders, public entities to whom the code will apply, the media, and public, all of which will be taken into consideration in finalising the code.