In 2014, the Nigerian Communications Commission, NCC, established the code of corporate governance for the telecommunications sector, notwithstanding its existence the Commission, has at several times find itself at loggerhead with the operators and stakeholders by adjusting its code of the code of corporate governance.THE Nigerian Communications Commission, NCC, have set the stage towards preventing further fisticuffs with operators and stakeholders who could undermine its regulatory role by adjusting its principles on corporate governance particularly as it relates to their operation.
The NCC has decided to make adherence to the code of corporate governance for the telecommunications sector, which was instituted in 2014 mandatory instead being voluntary, and this time around it comes with sanctions for telecoms operators who flout the code.
Examining the 12 principles of the code, it is obvious that may be decision by the Commission to consult with operators and stakeholders on Tuesday in Lagos over the need to make compliance mandatory maybe connected with recent developments in the sector, particularly the MTN Nigeria fine saga.
At the forum with the operators and stakeholders, which was attended by the Minister of Communication, Barrister Adebayo Shittu and the Executive Vice Chairman of the Commission, Prof. Umar Danbatta, the major thrust of the engagement was the quest for input from them.
Although the Minister and the helmsman of the NCC did not spill the details of the new code to them, it was made clear to the operators that it was not going to be business as usual but it was disclosed that the intent of the code was not for sanctions rather to ensure decorum in the sector.
According to the Minister, the quest to ensure strict compliance to the 2014 code of corporate governance was to new because there are existing codes in other sectors of the economy.
He said the new urge to make compliance strict was because of the need to improve the GDP from the sector, to make the industry more viable for investors and reduce corporate risk.
The NCC helmsman, Danbbatta in his opening remark disclosed that the urgency of mandatory compliance to the bothers on the need to grow the industry bigger, better and more relevant to successive generation.
According to him, a lasting legacy of a strong and virile industry, fit for successive generation worth bequeathing saying that the 12 principles were developed to protect the interest of investors and stakeholders as well as promote time-valued principles of accountability, responsibility, transparency, integrity and ethical conduct.
He revealed that the compliance with the provisions of the code was initially made voluntary for a period of one year, which has since elapse stressing that the shift from voluntary to mandatory compliance is to ensure that all licensees of the NCC still exist 200 years after.
Secretary of the Commission, Barrister Felix Adeoye disclosed that before deciding to move from voluntary level to mandatory compliance, the NCC did an industry survey to ascertain the level of compliance with the code, and that the findings showed that some companies complied with the requirements for board size and composition, while some board had just three members, contrary to the provisions of the code, which stipulates a seven-member board.
He said that most board were passive during the period under review as against the expectations of the code, which required a active board although there were boards that met one in a year, making it difficult for the board to discharge its primary oversight functions.
“Some other companies breached the chairman/CEO duality safeguard provided by the code of combing the chief executive officer’s position with that of the board chairman”, he said.
He re-echoed the position of the NCC boss that non-compliance will be followed with sanctions stressing that “the emphasis is not on sanctions, but in entrenching an abiding culture of good corporate governance practices that will sustain the industry beyond the present generation.”
Consultant to the Commission on the code, Mr. Ladi Smith of SIAO Consulting, recommended a report of each background and reference check of directors of telecos be made available to all members of the board and shareholders prior to his election into the board noting that it is enable them to make their own assessment of the directors.
He also said that there should be a board evaluation performance, which should be conducted annually by an independent external consultant appointed by the NCC saying that the rules, responsibilities and other expectations from the board should form the criteria for evaluation.
Smith said that the appointment of all directors of telecos should be formalised through a letter of appointment, disclosing the terms, conditions and responsibilities suggesting that the board should set up a nomination committee, with the responsibility to assist it in the process of identifying suitable persons to be appointed in the company.
He said further that telecos should have an audit committee that must nominate an external auditor for appointment, approve the terms of engagement and remuneration for the external audit engagement while also monitoring and reporting to the independent external auditor.
Smith said that the evaluation report should disclose the process of appraisal of the broad execution of its roles and the responsibilities, areas of improvement and training needs of the directors.
An expert in corporate governance, Prof. Fabian Ajogwu of the Lagos Business School said that the corporate governance will enhance business prosperity and corporate accountability, and that it has the ultimate objectives of realising long term shareholder value.
He observed that it holds the key that enables corporation to attract financial and human capital noting that good corporate governance will address the problem of power controlling shareholders and minority shareholders while at the same time tackling passive shareholders and deference to dominant shareholders.
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