Stakeholders say NCC’s code of corporate governance should be reviewed, amended for clarity

Stakeholders in Nigeria’s Information Communication Technology (ICT) sector say that the mandatory code of corporate governance for the telecommunications industry, enforced by the Nigerian Communications Commission (NCC), needs to be reviewed and amended with more precise and specific use of instructive language.

During a workshop in Lagos, organised by the commission to sensitise stakeholders and the general public on the new code which was hitherto voluntary, the regulator stated that it became necessary to make the code mandatory in order to ensure an enduring corporate instructional structure in place, with a view to sustaining stability in telecoms sector and that operators found to be violating the code will be sanctioned.

However, stakeholders at the program objected the mandatory enforcement of the code, saying that there is an urgent need to review the code which is somewhat confusing due to the use of blurred language before enforcement and that sanctioning should be prevented in order not to kill the sector.

Speaking at the workshop, Adedotun Sulaiman, Chairman Financial Reporting Council of Nigeria said that; “it is necessary for the NCC to review a few clauses in the code and use more precise language as this could be confusing.

“There is no clarity of roles in clause 2.1a which states that every licensee in the Nigerian telecommunications sector should have a board of directors appointed by its shareholders through a transparent process to be collectively responsible for the management of business of the company. The language used suggests that the board is collectively responsible for the management of the company. While this is true, the nature of the code calls for more precise language in the designation of roles, responsibilities and functions. The board should direct and the management should manage the day to day affairs of the company,” Sulaiman said.

In the same vein, Olusola Teniola, President, Association of Telecommunications Companies of Nigeria (ATCON) said during the panel discussion that there might be no need for the code of corporate governance by the NCC, as the companies operating in Nigeria are subsidiaries of larger foreign companies who already practice corporate governance.

“The telecoms industry has grown significantly over the years even without the mandatory compliance with code of corporate governance, however, if we must adopt the code, we need the commission to be proactive to prevent non compliance rather than focus on sanctions. Transparency and image of the industry is more important for foreign direct investment (FDI) and most investors will run away if they see that there is a harder environment,” Teniola said.

Responding to this, Umar Garba Danbatta, Executive Vice Chairman, NCC, said; “It is not too late for us to review the code, but we would stand our ground on sanctions because sanctions are an act of last resort. This code is not a regime of sanctions, rather, it fosters economic growth and encourages world best practices.”

Danbatta said; “the strategic objective of enforcing the code was to create higher performance standard so that the sector can become more attractive to investors.”

He further stressed that with the activation of the new code of corporate governance, the NCC is trying to ensure an enduring corporate instructional structure in place, with a view to sustaining stability in telecoms sector.

“We are in the process of trying to ensure we have transformational leadership in the telecoms sector.  Leadership that will introduce new ideas, new ways of work, with it-cannot- be-business-as-usual mentality, leadership that has vision and a compelling narrative about the future for all stakeholders in the industry. Unless and until we do this, we will not be able to sustain the contribution of the sector to GDP, which currently stands at about 9.8 percent.

“We are mindful of what we have to do to sustain this resilience as indicated by all the figures released by the National Bureau of Statistics (NBS), statistics which confirm the resilience and stability of the sector. That’s why we are taking these measures, measures that any regulator would proactively take to protect the industry,” Danbatta said.

 

Jumoke Akiyode Lawanson