By Dipo Olowookere
The Securities and Exchange Commission (SEC) has maintained that the code of corporate governance applies to all public companies operating in Nigeria.
The code is intended to facilitate sound corporate practices and behaviour and be a dynamic document that defines minimum standards of expected corporate governance in the country.
This week, the apex regulator of the capital market in Nigeria organised a special orientation session for unlisted public securities trading on the NASD OTC Securities Exchange platform.
During the event, SEC highlighted responsibility of directors in ensuring compliance with the code but also enthusiastically encouraged shareholders in public companies to assess the level of compliance of their company.
In implementing the code and measuring compliance SEC specifically requires all public companies to submit a corporate governance score card within one month of year end. This essentially is a self-appraisal from each company’s compliance with the code.
Furthermore, the regulator said the firms must submit quarterly (unaudited) financial statements within a month of the end of each quarter as well as an annual audited financial statements within three months of the end of each financial year.
The management of NASD has lauded this move and extension of the requirement to unlisted public companies trading on its platform.
It stressed that greater transparency into the governance and financial performance of public companies will lead to more efficient price discovery and investor confidence.
“Our preliminary check on OTC traded securities in November 2017 indicated that 12 out of the 36 companies scaled a basic test (tagged NASD BLUE stocks).
“A second review of compliance with the code is due in April 2018 and we look forward to a greater number of companies meeting standards set,” NASD disclosed in a newsletter obtained by Business Post.
