NIGERIA Law and Practice Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi, Toluwalase Oliver-Jude and Adedoyin Odekilekun, Jackson, Etti & Edu
ness and effectiveness, with the objective of supporting management in achieving cor - porate success. A key principle of Nigerian corporate governance is the separation of power: the chair of the board and the MD/ CEO cannot be the same person. In addition, the chair of the board should not be a chair or member of any board committee. • The MD/CEO is an executive director who oversees the day-to-day running of the company, including the implementation and achievement of the company’s strategic objectives. • Executive directors are senior management members involved in day-to-day operations, such as the chief financial officer (CFO), chief operating officer (COO), head of legal/compa - ny secretary, etc. They support the MD/CEO in achieving the company’s goals. • Non-executive directors oversee, construc - tively challenge and hold management accountable with respect to the implementa - tion of strategy. • Independent non-executive directors are non-executive directors with no ties to the company other than their board membership, ensuring an additional layer of objectivity. 4.3 Board Composition Requirements/ Recommendations To function effectively, a board requires the right mix of skills, experience and diversity. The com - position of the board is influenced by external factors, such as the governance framework rel - evant to the sector in which the company oper - ates, and by internal factors, including provisions in key company documents like the Sharehold - ers Agreement, Articles of Association, Board Charter and governance policy. External factors typically include specific regulatory require - ments, such as:
• board size; • specific mix of executive, non-executive and independent non-executive directors; • provisions for the prohibition of interlocking directorships; and • the necessary board skills and expertise to oversee the business effectively. Internal factors, on the other hand, are shaped by the company’s own governance documents, which may set additional criteria for board com - position based on the company’s goals and structure. The NCCG recommends that the board be of an adequate size relative to the scale and complex - ity of the company’s operations. It emphasises the importance of considering factors such as the balance of knowledge, skills, experience, diversity and independence to ensure the board can objectively and effectively fulfil its govern - ance duties and responsibilities. The Code also advocates for the appropriate mix of executive, non-executive and independ - ent non-executive directors, with the require - ment that the majority of the board should be non-executive directors, to ensure a proper bal - ance of oversight and management. The Code also highlights the need for a sufficient number of members who are qualified to serve on the board’s various committees and who can form a quorum at board meetings. 4.4 Appointment and Removal of Directors/Officers The first directors of a company are appointed at incorporation by the promoters of the company, while subsequent appointment is by ordinary resolution of shareholders at the general meet - ing. However, where there is a casual vacancy arising from the death, retirement, resignation or
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