NIGERIA Law and Practice Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi and Toluwalase Oliver-Jude, Jackson, Etti & Edu
(except small companies) must have at least two directors, while public companies must have a mini - mum of three directors, including at least one INED. Boards are typically composed of executive directors and non-executive directors, including independent non-executive directors who provide objective over - sight. Best practice, as reflected in the NCCG 2018, recommends that non-executive directors form the majority of the board. There is also growing empha - sis on diversity in skills, experience and gender, to strengthen board effectiveness and decision-making. 3.4 Appointment and Removal of Directors/ Officers The appointment, rotation and removal of directors in Nigeria are governed primarily by CAMA and the company’s internal governance documents. • Appointment: the first directors are appointed by the promoters at incorporation, while subsequent directors are appointed by shareholders through an ordinary resolution at a general meeting. Where a casual vacancy arises (eg, death, resignation or removal), the board may appoint a replacement, subject to shareholder ratification at the next gen - eral meeting. • Disqualification: persons disqualified from acting as directors include minors (under 18), persons of unsound mind, individuals removed or disqualified for insolvency, fraud or bankruptcy, and corporate bodies (except through a nominated representa - tive). • Retirement and re-election: unless otherwise pro - vided in the articles, all directors retire at the first AGM, and thereafter one third retire annually by rotation. Retiring directors may be reappointed. Removal of a Director Under CAMA in Nigeria Unless otherwise provided in a company’s articles of association or board charter, the removal of a director in Nigeria is governed by CAMA. The process begins with the issuance of a special notice of the resolution to the company at least 28 days before the meeting. Upon receipt, the company secretary must send a copy of the notice to the affected director and issue notice of the meeting to members at least 21 days before the meeting, including any representations
made by the director. The director has the right to be heard at the meeting and may present his or her case, following which the company may pass an ordinary resolution to remove the director or otherwise. 3.5 Independence of Directors CAMA establishes directors as fiduciaries, requiring them to act in good faith and in the best interests of the company. Directors must avoid conflicts of interest and disclose any direct or indirect interests, including personal or related-party dealings. CAMA also pro - motes board independence through the inclusion of INEDs and the separation of the roles of Chair and CEO. The NCCG 2018 further defines independence as freedom from relationships that may impair objec - tive judgement, and recommends a majority of non- executive and independent directors on the board. The SEC has reinforced these standards with rules on tenure limits and cooling-off periods, and restrictions on transitioning independent directors into executive roles. In practice, conflicts are managed through disclosure, transparency and recusal where necessary. 3.6 Legal Duties of Directors/Officers Directors’ duties extend to company officers and are statutorily defined under CAMA. They include the obli - gation to: • act in good faith and in the best interests of the company, preserving its assets and advancing its objectives; • exercise due care, skill and diligence, having regard to what a reasonably competent director would do, including consideration of environmental impacts; • consider the interests of employees and members when making decisions; • use powers only for proper purposes, and not for collateral or personal aims; • exercise independent judgement, without being bound to vote in a predetermined way; • delegate powers responsibly, without abdicating oversight or accountability;
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