By Onome Amuge
NGX Regulation Limited (NGX REGCO), a wholly owned subsidiary of Nigerian Exchange Group Plc (NGX), has enjoined Nigerian companies to have proper nomination guidelines in place to ensure strict adherence to CAMA 2020 laws.
Tinuade Awe, the chief executive officer of NGX REGCO, stated this during a programme on the Institute of Nigeria (IoD) Nigeria Podcast recently.
According to Awe, Section 275 of the Companies and Allied Matters Act (CAMA) 2020, states that every public company must now have a minimum of three independent directors.
She noted further that research shows that the selection and nomination process of independent directors significantly undermines the ability of independent directors to effectively perform their oversight role.
While pointing out that CAMA had thrown a curve as regards corporate governance in Nigeria, Awe said that companies need to have a proper nomination process as this would put an end to the conflicting issues about laws in the capital market.
In her words; “Looking at CAMA and Nigerian code of corporate governance, SEC guidelines on corporate governance, CBN guidelines on independent directors, you will see that each guidelines have a bit of difference but the bottom line is they are all geared to figure out how to assess the independence of the directors, issues of materiality and non-peculiar interest.
However, CAMA 2020 says that every company shall have three independent directors while the code says have a majority of directors. The problem is that CAMA clearly states that we should have three independent directors. We are met with the company laws in which we are supposed to obey but fortunately or unfortunately, CAMA is the law because it has gone through that National Assembly process.”
Awe stated that to avoid being engrossed in any conflict concerning the law , companies must and should have a proper nomination and governance committee that have a job description for what is needed for a director based on CAMA. She added that enhancing the independence of some directors would substantially improve the protection of public investors.