NIGERIA Law and Practice Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi and Toluwalase Oliver-Jude, Jackson, Etti & Edu
Corporate governance compliance for publicly traded companies in Nigeria is mandatory and enforceable. Non-compliance may attract regulatory sanctions, director liability, suspension or delisting, and signifi - cant reputational damage. 1.4 Stock Exchange Requirements Developments Regulatory reforms introduced under the ISA 2025, together with related SEC circulars and NGX guide - lines, have significantly tightened listing standards and corporate governance obligations for publicly traded companies and capital market operators (CMOs) in Nigeria. These reforms reflect a regulatory focus on accountability, transparency, board effectiveness and enhanced investor protection. Board Structure and Composition • Heightened director accountability: under ISA 2025, directors are now subject to enhanced personal civil and criminal liability for disclo - sure failures and regulatory breaches. Directors are required to exercise individual due diligence and can no longer rely solely on collective board decisions or board approvals as a shield against liability. • Director tenure limits: new tenure limits have been introduced for directors of significant public inter - est entities, providing that directors may serve a maximum of ten consecutive years on the same board and a cumulative maximum of 12 years within the same corporate group. These limits are designed to curb entrenchment and promote board refreshment. • Cross-directorship restrictions: membership on the boards of competing companies is now strictly prohibited, strengthening conflict-of-interest safe - guards and protecting competitive integrity. • Prohibition of INED transmutation: a key SEC circular issued in June 2025 expressly prohibits the conversion of INEDs into executive directors or CEOs within the same company or group. This measure reinforces INED independence and pre - serves objective oversight. • Cooling-off period for leadership roles: former CEOs or executive directors are prohibited from assuming the role of Board Chair until after a man - datory three-year cooling-off period.
• Mandatory AI oversight: boards are increasingly expected to oversee responsible use of AI, sup - ported by formal AI governance frameworks, board-level policies and director training. While still emerging, this expectation signals regulators’ intent to treat AI risk as a core governance issue. Disclosure Obligations • Expanded shareholding disclosure: directors are now required to disclose all shareholdings, includ - ing direct and indirect interests, and proprietary, nominee and fiduciary holdings. These disclosures must be made prior to appointment and updated in annual reports, enhancing transparency around control and related-party interests. • ESG and sustainability reporting: regulators are embedding ESG considerations into board-level oversight. A phased implementation of sustainabil - ity reporting is underway, with a voluntary adoption period for IFRS Sustainability Disclosure Stand - ards from 2024–2027, and mandatory sustainabil - ity reporting expected to commence from 2028. Boards are therefore expected to begin integrating ESG governance structures ahead of full regulatory enforcement. • Real-time market disclosure: listed companies are now required to make real-time disclosure of price-sensitive information, marking a shift away from deferred or periodic disclosure models. This enhances market integrity and reduces information asymmetry. Shareholders and Market Participants • Review of free-float requirements: regulators are actively reviewing free-float thresholds to improve market liquidity, particularly in large issuers where founding or controlling shareholders retain the majority of shares. This reform aims to expand public participation and deepen capital market activity. • Recapitalisation of CMOs: a major recapitalisation exercise for CMOs is ongoing, with a compliance deadline of 30 June 2027. The initiative is intended to strengthen systemic resilience, improve opera - tional capacity and protect minority investors from market failures. • Enhanced minority shareholder protection: ISA 2025 places stronger emphasis on minority inves -
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