NIGERIA Law and Practice Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi, Toluwalase Oliver-Jude and Adedoyin Odekilekun, Jackson, Etti & Edu
1.3 Corporate Governance Requirements for Companies With Publicly Traded Shares Companies with publicly traded shares are sub - ject to the following requirements, among oth - ers. • Board composition: the board of a publicly traded company should consist of no fewer than five members, with at least one inde - pendent non-executive director. • Interlocking directorship: to preserve the objectivity and independence of the board, it is recommended that no more than two members of the same family should serve concurrently on the board of a public com - pany. In addition, cross-membership on the boards of two or more companies should be discouraged. • Separation of power: the positions of the chair of the board and chief executive officer in a publicly traded company must be sepa - rate and held by different individuals. • Board committees: A public company is required to have audit, nomination, govern - ance, remuneration and risk management committees. • Board evaluation: to ensure continued effec - tiveness and accountability, the board of a public company is required to conduct an annual evaluation of its overall performance, as well as that of its committees, the chair and each individual director. 2. Corporate Governance Context 2.1 Hot Topics in Corporate Governance Sustainability and Environmental, Social and Governance (ESG) Reporting There is increasing regulatory focus on sustain - ability and ESG reporting in Nigeria. The Finan -
cable laws, and for the filing of the necessary documents, returns and statements. • Limited partnership: this business structure consists of no more than 20 partners, includ - ing at least one general partner who has unlimited liability for the debts and obligations of the partnership, and at least one limited partner, whose liability is restricted to the amount contributed to the partnership. The general partners are responsible for the day- to-day management of the business, while limited partners typically do not take part in management. • Business name: a business name is the simplest and most flexible form of business registration in Nigeria and is ideal for small- scale businesses and individual entrepre - neurs. Under CAMA, a business name is not recognised as a separate legal entity, which means that the business and the owner are considered the same under the law, and the owner(s) bears personal liability for all busi - ness debts and obligations. 1.2 Sources of Corporate Governance Requirements The principal sources of corporate governance for companies in Nigeria are CAMA and the Nigerian Code of Corporate Governance 2018 (NCCG). The Code of Corporate Governance for Public Companies in Nigeria 2011, issued by the Securities and Exchange Commission (SEC), is applicable only to public companies. It is also important to note that there are industry-specific corporate governance codes issued by regula - tory bodies such as the Central Bank of Nigeria (CBN), the National Insurance Commission (NAI - COM) and the Pension Commission (PENCOM), which provide tailored governance frameworks for organisations within their respective sectors.
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