Economy
Compliance with Corporate Governance Code Very Low in Nigeria—SEC
By Dipo Olowookere
Acting Director General of Securities and Exchange Commission (SEC), Ms Mary Uduk, has lamented the low level of compliance with corporate governance code in Nigeria.
Speaking at a function in Lagos on Thursday, the SEC boss said some companies listed on the Nigerian Stock Exchange (NSE) lacked understanding of the SEC Code 2011, which talked about code of corporate governance for public companies in the country.
According to SEC Code 2011, the rules were not intended to be rigid, but to “be viewed and understood as a guide to facilitate sound corporate practices and behaviour.”
The code stipulated that the Board is accountable and responsible for the performance and affairs of the company and should define its strategic goals and ensure that its human and financial resources are effectively deployed towards attaining those goals.
Also, the board was mandated to ensure that the company was properly managed, overseeing the effective performance of the management in order to protect and enhance shareholder value and to meet the company’s obligations to its employees and other stakeholders.
But Ms Uduk said some boards were not performing these and other roles expected of them by the corporate governance code.
“We observed that most of the issues covered in the SEC Code 2011 have remained difficult for some entities to observe in terms of fairness, independence, accountability and transparency requirements by their boards.
“The Code of corporate governance talks about how companies are run and managed.
“Looking at the scorecard as a follow up to the code, we have been able to see areas of weaknesses and strength across companies and these areas are very germane to having strong corporate governance.
“For example, the Boards are expected to have a deep understanding of the business and the environment to which the business is run.
“They are supposed to understand the blueprint, they are supposed to speak out, they are supposed to be innovative and they are supposed to have a little bit of financial experience so they could be able to interpret financial statements,” Ms Uduk said at the Alliance Law Firm’s Maiden Lecture Series, Luncheon and Book Presentation.
At the lecture themed ‘Contemporary Corporate Governance Issues in Nigeria,’ the SEC DG, who was represented by a Director at the agency, Mr Edward Okolo, pointed out that access to critical indices by which companies’ compliance with the SEC Code could be measured remained difficult.
She stressed that experiences globally have demonstrated that enterprises with commitment to corporate governance principles perform better and have continued to enjoy investors and other stakeholders’ confidence in building their brands.
Ms Uduk urged publicly listed companies to do more to strengthen their boards so as to have better corporate governance system.
Business Post reports that the SEC Code 2011 stipulates that The CEO/MD should be knowledgeable in relevant areas of the company’s activities. He should demonstrate industry, credibility and integrity and should have the confidence of the Board and management.
Also, executive directors should be involved in the day-to-day operations and management of the company. In particular, they should be responsible for the departments they head and should be answerable to the Board through the CEO/MD.
Furthermore, non-executive directors are expected to be key members of the Board. They should bring independent judgment as well as necessary scrutiny to the proposals and actions of the management and executive directors especially on issues of strategy, performance evaluation and key appointments.
For independent directors, they should have no significant contractual relationship with the company or group and must be free from any business or other relationship which could materially interfere with their capacity to act in an independent manner and “every public company should have a minimum of one independent director on its Board.”
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
