By Agency Reporter

Friday, 18 Feb 2011

The Securities and Exchange Commission has said the newly approved code of corporate governance for public companies will be effective from April 1, 2011.

The commission said in a statement issued on Thursday that the code would apply to all public companies listed on the Nigerian Stock Exchange.

According to SEC, the code will also apply to companies seeking to raise funds from the capital market through the issuance of securities or seeking listing by introduction.

The commission urged public companies to comply with the principles and provisions of the code, which would form the basis of the minimum standard of measuring their corporate behaviour.

According to SEC, companies are expected to demonstrate sufficient compliance with the principles and provisions of the code appropriate to their size, circumstances or operating environment.

It noted that the code was not meant to be rigid set of rules but should be viewed and understood as a guide to sound corporate practices and behaviour.

“The code should be seen as a dynamic document defining minimum standards of corporate governance expected particularly of public companies with listed securities,” it said.

The commission pointed out that weak corporate governance was responsible for some recent corporate failures in Nigeria.

The code spelt out the roles of board of directors and other workers in companies quoted on the Exchange.

The News Agency of Nigeria reports that SEC, had on February 8, 2011, approved the new code of corporate governance for public companies.

The commission in September 2008 inaugurated a national committee to review he 2003 Code of Corporate Governance for Public Companies in Nigeria.

The committee was to address the weaknesses of the code and to improve the mechanism for its enforceability.

It was asked to identify weaknesses in and constraints to good corporate governance and to examine and recommend ways of effecting greater compliance.

 

Source: Punch