ABUJA, OCTOBER 19, 2016 – The Financial Reporting Council of Nigeria (FRCN) has released the National Code of Corporate Governance. The exercise was done in accordance with Section 50 of the Financial Reporting Council of Nigeria Act, 2011.
The new code, among other things, requires the Directorate of Corporate Governance to develop the principles and practices of Corporate Governance applicable in Nigeria.
Details of code indicated that the Code of Corporate Governance for the private sector is mandatory while the Code of Governance for Not-for-Profit entities is “Comply or Justify non-compliance”. It also stipulated that the Code of Governance for the Public Sector will not be applicable immediately until an executive directive is secured from the Federal Government of Nigeria.
This, it said, was given that the enabling laws that set up most government establishments already carry some form of governance structure that will require an umbrella legislation to unify the different provisions of those laws to synchronise with this Code.
Before the release of the code, the Federal High Court, Lagos had in a suit brought before it, challenging the code, the court agreed with FRC’s preliminary objection and struck out the suit no: Fhc/L/Cs/672/15 – Chief Timothy Adesiyan & 9 Ors. V. the Honourable Minister of Trade and Investment & 3 Ors.
“In its ruling, the court essentially held that the plaintiffs lack the locus standi to institute the suit as they are not within the purview of public interest entities, public companies or private companies as recognised under the Financial Reporting Council of Nigeria Act and the Draft/Proposed National Code of Corporate Governance,” it said.
The plaintiffs had instituted this suit against the defendants by an originating summons dated May 11, 2015 essentially seeking declarative and injunctive reliefs against the Defendants. The crux of the Plaintiffs’ suit was to seek a declaration that it is ultra vires for the first, second and fourth defendants to promulgate, make or issue the proposed National Code of Corporate Governance 2015, same not falling within the power conferred on the first and second defendant by the Financial Reporting Council of Nigeria Act, 2011.
“The ruling of the court delivered yesterday has brought the matter to an end, subject to the Plaintiffs’ right of appeal. We have applied for the Certified True Copy (CTC) of the Ruling of the Court and shall forward same to you as soon as we obtain it,” it said.