The Federal Government has told telecoms companies operating in Nigeria that the positions of Chairman of Board of Directors and Chief Executive Officer (CEO) “should be occupied by two separate individuals” under a Corporate Governance plans to oversee internal management of players in the industry.[blockquote right=”pull-right” cite=”NCC”]The Code’s Principle 7.0, which asserts the duality of the two positions in any telecoms business in Nigeria, stipulates that, “In order to institute and maintain independence and proper checks and balances, the positions of Chairman of the Board of Directors and that of Chief Executive Officer should be occupied by two separate individuals.”[/blockquote]
The telecoms industry regulator, which announced the coming into force of the Code of Corporate Governance for The Telecommunications Industry, said that government wants to oversee the management of telecoms companies in Nigeria because of their perceived importance to the economy.
One of the highlights of the Corporate Governance Code by the Nigerian Communications Commission (NCC) is a provision that now bars a single person from combining the dual offices of Chairman of Board of Directors and CEO in any telecoms company operating in Nigeria.
The Code’s Principle 7.0 asserting duality of the two positions in any telecoms business in Nigeria stipulates that, “In order to institute and maintain independence and proper checks and balances, the positions of Chairman of the Board of Directors and that of Chief Executive Officer should be occupied by two separate individuals.”
NCC said that the Board of telecoms company carries hefty responsibility in ensuring the smooth and effective management of such businesses and occupies a very key role to balance the interest of its shareholders and other external stakeholders.
“The Board is the highest decision-making body, charged by the shareholders in general meeting with responsibility for direction, control and management of the affairs of the company and is the body with primary responsibility for Corporate Governance in the company. While the Board may delegate some of its powers, it remains responsible for the governance of the organisation”, according to the Code.
The role of the Board also comes into focus when balancing the interests of stakeholders to ensure that they establish “leading practices that enhance public perception, reputation and sustainability of the company.”
According to the Corporate Governance Code, “the going concern principle deals with the desirability that organisations will grow and outlive their founders.”
Eugene Juwah, Executive Vice Chairman of NCC explained that the new Governance Code became necessary to foster good corporate governance standards and practices in the telecoms companies that encourages corporate success and business sustainability.
According to the telecoms regulator, “The need to develop a sector specific Corporate Governance Code for the Nigerian Telecommunication Industry is necessary to address the peculiarities of the sector that are not typically dealt with under broadly-aimed Codes. This is more so in view of the fact that the telecommunications sector though dominated by privately-held companies is of strategic importance to the economy at a macro level, and has considerable impact at the micro level.”
Juwah is confident that the Code of Corporate Governance for the telecoms sector will “promote good corporate governance practices in the industry and would create a credible industry which every stakeholder can have confidence in as well as foster the growth and development of the industry and larger national economy.”
He added that the Code was developed by the Nigerian Telecommunications Sector Corporate Governance Working Group (CGWG) inaugurated on October 24, 2012 with membership drawn from across the Nigerian telecommunications sector, the NCC and Corporate Governance Consultants/ Experts.
Fabian Ajogwu, a Senior Advocate of Nigeria chaired the CGWG that had other members including Okechukwu Itanyi, Executive Commissioner of NCC; Funlola Akiode of NCC; Josephine Amuwa of NCC; Chidi Diugwu of NCC and Pankan Eze, Secretary of CGWG from NCC.
Other members include Oyeronke Oyetunde of MTN; Felix Omojola of MTN; Osondu Nwokoro of Airtel; Shola Adeyemi of Airtel; Ibrahim Dikko of Etisalat; Ikenna Ikeme of Etisalat; Olayinka Olafimihan of Globacom; Tosin Cole of Globacom; Martins Ogbolu of Vodacom and Nkechi Newton-Denila of Vodacom.
Others are Gbenga Onakomaiya of IHS; Jumole Ademuliyi Ajala of IHS; Bosun Hambolu of Starcomms; Frank Omizu of Starcomms; Nechi Ezeako of CLB Sage and Osaretin Odaro-Oyewumi of CLB Sage.