The Steering Board of the Corporate Governance Rating System (CGRS) says it has passed 25 companies which successfully scaled its rating test, having scored the required pass mark of 70 percent, whilst 87 others are at various stages of completing the process.
The 25 successful companies join eight other firms that retained their rating from the CGRS pilot in 2014, bringing the total number of companies rated as of today to 33.
At a press conference in Lagos Monday, Tinuade, Awe, the chairman of the Steering Board and executive director, regulation, The Nigerian Stock Exchange (NSE), congratulated the 435 directors who had passed their certification test.
She said the presentation of awards and certificates to chairs of companies and directors being celebrated would hold in February 2018, adding that event details would be announced later.
In answer to a question, she said the CGRS was not concerned with ranking the successful companies but to engage them on the course of improved performance, through discussions and interactions.
She said, ranking the companies might open the door for unhealthy competition which would defeat the essence of gradual engagement with the companies for improved performance
Awe said the board planned to publish this year, CGRS index which would indicate the performance of the companies, pointing out that this would serve the purpose of ranking.
The CGRS was introduced into the Nigerian capital market in 2012 and launched in 2014 after it was successfully piloted with a number of volunteer companies, including those now listed on the Nigerian Stock Exchange’s Premium Board.
The process comprises three segments: an independently verified, self-assessment by the company; a certification of director awareness of their fiduciary duties; and, a corporate integrity assessment where perceptions of actual company behavior are sought from internal and external stakeholders.
Combinations of the three segments with attendant weighted scores are collated and companies with a score of 70% and above are accorded the CGRS certification mark celebrating the degree to which they have evolved the quality of their corporate governance.
According to Awe, “the period between 2000 and 2010 were difficult years for business around the world, littered with major corporate failures due to corruption and poor corporate governance, as well as financial crises that shook many economies.
“Companies have since then been evolving their ability to improve board structure and responsibility; business ethics and anti-corruption; transparency and disclosure; internal and external audit and control; and, better protect stakeholder and shareholder rights,” she added.
Soji Apampa, chief executive officer, The Convention on Business Integrity (CBi) that partnered with the NSE to design, pilot, roll-out and manage the initiative, said: “The success rate and increased participation in the CGRS initiative is a testament to the rising acclaim that corporate governance is receiving in corporate Nigeria. It is important to celebrate companies and directors who are leading the renewed charge whilst encouraging others to participate.”
Oscar Onyema, CEO of The Nigerian Stock Exchange, noted: “As we make surefooted steps to globalise our market, the CGRS rating will bolster the confidence to invest in our market especially from international investors. Increasingly, our listed companies are meeting their compliance and requirements and we will continue to protect investors in our market through a robust regulatory regime.”
The members of the CGRS Steering Board are Tinuade Awe of the NSE, Olubukanla Rufai, representing the Securities & Exchange Commission, Wole Famurewa of CNBC Africa, Vivien Shobo of Agusto & Co., Soji Apampa, of The Convention on Business Integrity and Cynthia Akpomudiare, Project Director, CGRS.