Thread by @yinkanubi

On 17/10/16, the National Code of Corporate Governance Codes for Private and Not-for-Profit Orgs was issued by the FRC. 11 days later, it was suspended. In Jan 2018, a 15 man technical committee was inaugurated with a mandate to review and re-issue the code. #FRCGovernanceCode

The committee headed by the former DG of PenCom Muhammad Ahmad and comprising of many sectoral regulators (like CBN, NIS, SEC, PENCOM, CAC etc) conducted extensive reviews and consultations with a wide group of stakeholders in line with its mandate. #FRCGovernanceCode

Today, the FRC has finally released for public review the exposure draft of the Nigerian Code of Corporate Governance 2018. This will be followed up by series of public hearings in different geopolitical zones to further enlighten people #FRCGovernanceCode
drive.google.com/file/d/1-g0OFj…

In summary, the exposure draft, consist of 7 parts and 28 Principles each with practices recommended by the code for implementation. In all, there are 230 practices. If the principles are the "What" to be done, the practices are the "How" to do it. #FRCGovernanceCode

According to the The Executive Secretary/CEO FRC, Daniel Asapokhai, Investors are attracted to environment where internationally agreed standards of governance are observed. Implementing those standards, enhances national competitiveness. #FRCGovernanceCode

The question everyone will be asking is “What's the difference between d Suspended "NATIONAL CODE OF CORPORATE GOVERNANCE and d new "NIGERIAN CODE OF CORPORATE GOVERNANCE?" Well for one, while d suspended code is "Rules Based", d new code is "Principles Based". #FRCGovernanceCode

Secondly, while the suspended code is a "One-Size-Fit all", the proposed code is applicable to companies of different sizes & complexities. Thirdly, while compliance with the suspended code is mandatory, the new code has adopted the "Apply & Explain" Principle. #FRCGovernanceCode

Also, while the suspended code is prescriptive, the new code is not prescriptive. A major contention of the suspended code was the provision that independent non-executive directors may appoint one of them as the lead INED. That is no longer so in the new code. #FRCGovernanceCode

It was gratifying to see how the new code resolves the previous conflicts with sectoral codes. Primary regulators are encouraged to put in place guidelines in accordance with the “principles” as to "how" they will be applied in their sector. #FRCGovernanceCode

In terms of enforcement, the primary mechanism is through stakeholders. The first mechanism is market discipline. The market will invariably reward companies that comply best with the code while punishing those that do not. Investor perception matters.
#FRCGovernanceCode

In all, the technical committee identified 10 conflict areas with d suspended code some of which were:
- Code philosophy
- Applicability
- Conflict with CAMA
- Cost of implementation
- Tenure of Directors
All 10 conflict areas were addressed in the new code.
#FRCGovernanceCode

The effective date for reporting on the application of the Nigerian Code of Corporate Governance will be for the periods ending on or before January 1, 2020. However, earlier reporting is encouraged by the FRC. #FRCGovernanceCode

I will be doing a more detailed thread on this proposed code later. In the meanwhile, please feel free to send in your comments and questions. #AskQuestions I will try to answer them to the best of my ability. For easier tracking, please quote the hashtag #FRCGovernanceCode