By Nse Anthony-Uko
(Sundiata Post) — The Nigerian Communicatios Commission (NCC) on Tuesday began the compulsory implementation of the Code Corporate Governance drafted in the year 2012 which effectively limits the term of any chief executive, director or chairman to 15 years in office.
At a telecommunication industry stakeholders forum organised by the Commission in Lagos on Tuesday to present the document to the public, executive vice chairman, NCC, professor Umar Danbatta, said it would usher in a new era of transparency, accountability, investment inflow and accelerated growth of the industry.
Danbatta added that with the mandatory implementation, non-compliance with the code henceforth would be met with heavy sanctions.
Also, in an interactive session with the media a day earlier in Lagos, NCC’s Executive Commissioner, Stakeholders Management (ECSM), Sunday Dare, said Nigeria’s telecommunications industry must be guided by global best practices to sustain the investments and attract more, as such, the enforcement of the code becomes a task that must
Dare, who explained that the Corporate Governance Code was introduced in 2012, which as at then was voluntary, said an agreement in the industry revalidated the code in 2014 and that by November 2016, it became mandatory, “but henceforth, the commission will monitor strictly, compliance with the code.”
He noted that had it been the code has been properly monitored for compliance, “probably what happened to Etisalat, now 9mobile might not have happened.”
Dare, who alerted the operators to the fact that compliance with the code will be vigorously monitored, however said the code is not intended to micro manage any of the service providers.
According to him, while sanctions are inevitable for erring operators, “there will also be reward for good behavior.” The NCC ECSM said such codes are not peculiar to the telecommunications industry, stressing that such is already in place in the banking sector, stock market, among others.
In his response, the Chairman of the Code of Corporate Governace Working Group, David Adeoye, said most of the telecommunications companies have gone beyond just being a private firm, they are somehow public, “because they are holding peoples’ money. Some subscribers have up to N250, 000 Airtime on their phones, even above that. So, there must be constant check on them to ensure there is no abuse.”
Adeoye said telecoms operators are special companies, next to the oil sector, there is a nexus between investment and best practices, “standards, accountability, transparency and other internal activities must be done in line with best practices.”
The NCC said it discovered significant deviations from the key principles contained in the Code, therefore, there was urgent need for all operators to fully align with these principles in order to ensure that the industry moves on the same trajectory.
The Corporate Goverance Code showed that compliance with it is mandatory for all licensees that meet one or more of the following criteria; spread of operations of the licensee covers a minimum of three geo-political zones; turnover of the licensee is in excess of N1 billion; the number of staff employed is in excess of 200 and where the licensee has a subscriber base of 500,000 or more.
In the area of tenure and re-election of directors, the code explained that to ensure continuity and injection of fresh ideas, a Director may serve on a board for a period of three terms of five years each. No director shall serve on any board for a period exceeding 15 years.
Subject to satisfactory performance and the provisions of CAMA, all Directors shall be submitted for re-election at regular intervals of five years. In order to guide decision of shareholders, names and sufficient biographical details of Directors nominated for reelection should be accompanied by performance evaluation statement and any other relevant information.
The Code also mandated that companies are expected to present a fair, balanced, understandable and transparent assessment of the licensee’s position and prospects to externalstakeholders.
“Boards should develop a corporate reporting model that is tailored to the needs of shareholders and other stakeholders. The corporate reporting model should be built upon principles of transparency that are embedded in the presentation and disclosure of information relating to the licensee’s activities as well as the Board’s stewardship of the business,” it stated.
In terms of auditing, Principle 11.7c informed that no person shall be appointed as the Head of Internal Audit of a licensee unless such person has three years of relevant experience in Audit or Finance or Compliance functions, and is a member of a recognized body of professional Accountants in Nigeria; or a Certified Internal accountant.