NECA backs FG on suspension of FRC’s code of corporate governance

Nigeria Employers’ Consultative Association (NECA) has backed the decision of the Federal Government to suspend the recently released code of corporate governance the Financial Reporting Council (FRC).

According to NECA, the suspended code of corporate governance was a product of unilateral decision by the FRC, as the Organised Private Sector (OPS) was never consulted or its input sought the council.

“NECA considered the action appropriate in view of the failure of FRC to secure the buy-in of the Organised Private Sector (OPS) on such an important guideline. It would be recalled that NECA on behalf of the OPS had taken the issue up with FRC through dialogue, the outcome of which the FRCN had disdainfully ignored in the publicised document that was eventually released,”, the employers’ body said.

Olusegun Oshinowo, the director general of NECA, commenting on the development, added that “it was disheartening that the FRC went ahead to release the code without respect to the outcome of social dialogue and engagement with stakeholders”.

According to Oshinowo, “The timely intervention by the minister is a testimony of the avowed commitment of the Federal Government to work with the Private Sector in the resuscitation of the flagging economy.”

NECA, according to the Oshinowo, believes that the decision will serve as a lesson to other agencies of government and will begin to see the private sector as critical stakeholders and partners in the management of the economy and country as a whole.

Okechukwu Enelamah, Nigeria’s minister of Industry, Trade and Investment, who ordered the suspension of the code in a three-paged query, also requested the council led by Jim Osayande Obazee, its executive secretary/chief executive to provide among others the regulatory approach that undergirds the code; the clear conflict between provisions of the Code and the Legislation –Financial Reporting Council of Nigeria Act, 2011.

As a strategic document, FRC was also asked to provide evidence of the adoption of the Code by the Board of the Council and the Minutes of the meeting at which the Code was adopted by the Board.

Among other questioned raised, Financial Reporting Council is to tell the Federal Government whether the committee on Corporate Governance, in Section 51 of the Financial Reporting Council of Nigeria Act, 2011, empowered to issue the Code of Corporate Governance, in a position to act in the absence of the Board of the Council in the light of provisions of Sections 2 (1) and 10 (d) of the Act.     

The Federal Government recognises that an enabling environment for business is critical to the rejuvenation and sustainable growth of Africa’s biggest economy. The environment will demand careful, deliberate, strategic and informed actions at addressing the impediments to doing business in Nigeria.